Investors may wish to note that the Lead Independent Director of Monolithic Power Systems, Inc., Kuo Wei Chang, recently netted US$64k from selling stock, receiving an average price of US$1,282. It might not be a huge sale, but it did reduce their holding size 13%, hardly encouraging.

The Last 12 Months Of Insider Transactions At Monolithic Power Systems

Over the last year, we can see that the biggest insider sale was by the Founder, Michael Hsing, for US$74m worth of shares, at about US$980 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$1,311. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 6.7% of Michael Hsing's stake.

Insiders in Monolithic Power Systems didn't buy any shares in the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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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. Monolithic Power Systems insiders own about US$2.3b worth of shares (which is 3.5% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Monolithic Power Systems Tell Us?

Insiders sold Monolithic Power Systems shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. It is good to see high insider ownership, but the insider selling leaves us cautious. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision.

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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.

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.