Super Micro Computer, Inc. (NASDAQ:SMCI) shareholders (or potential shareholders) will be happy to see that the Independent Director, Shiu Chan, recently bought a whopping US$1.1m worth of stock, at a price of US$568. There's no denying a buy of that magnitude suggests conviction in a brighter future, although we do note that proportionally it only increased their holding by 4.9%.

Check out our latest analysis for Super Micro Computer

The Last 12 Months Of Insider Transactions At Super Micro Computer

The Founder, Charles Liang, made the biggest insider sale in the last 12 months. That single transaction was for US$13m worth of shares at a price of US$252 each. That means that even when the share price was below the current price of US$682, 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 0.9% of Charles Liang's stake.

In total, Super Micro Computer insiders sold more than they bought over the last year. The average sell price was around US$247. It's not particularly great to see insiders were selling shares at below recent prices. Since insiders sell for many reasons, we wouldn't put too much weight on it. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

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Insider Ownership Of Super Micro Computer

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Super Micro Computer insiders own about US$5.7b worth of shares (which is 15% 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 Do The Super Micro Computer Insider Transactions Indicate?

Unfortunately, there has been more insider selling of Super Micro Computer stock, than buying, in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. But it is good to see that Super Micro Computer is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that Super Micro Computer is showing 4 warning signs in our investment analysis, and 1 of those is potentially serious...

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.

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.