Yahoo Finance Cadence Design Systems Insiders Sold US$6.0m Of Shares Suggesting Hesitancy
The fact that multiple Cadence Design Systems, Inc. (NASDAQ:CDNS) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, as the latter can be open to many interpretations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
View our latest analysis for Cadence Design Systems
Cadence Design Systems Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Independent Director, Alberto Sangiovanni-Vincentelli, for US$2.0m worth of shares, at about US$230 per share. That means that even when the share price was below the current price of US$258, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 11% of Alberto Sangiovanni-Vincentelli's stake.
In the last year Cadence Design Systems insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insiders At Cadence Design Systems Have Sold Stock Recently
The last three months saw significant insider selling at Cadence Design Systems. In total, Independent Director Alberto Sangiovanni-Vincentelli dumped US$965k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Insider Ownership
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Cadence Design Systems insiders own about US$652m worth of shares (which is 0.9% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About Cadence Design Systems Insiders?
An insider sold Cadence Design Systems shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. But since Cadence Design Systems is profitable and growing, we're not too worried by this. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. Of course, the future is what matters most. So if you are interested in Cadence Design Systems, you should check out this free report on analyst forecasts for the company.
Of course Cadence Design Systems may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
