We wouldn't blame Applied Materials, Inc. (NASDAQ:AMAT) shareholders if they were a little worried about the fact that Prabu Raja, the President of Semiconductor Products Group recently netted about US$25m selling shares at an average price of US$505. That sale reduced their total holding by 12% which is hardly insignificant, but far from the worst we've seen.

Applied Materials Insider Transactions Over The Last Year

In fact, the recent sale by Prabu Raja was the biggest sale of Applied Materials shares made by an insider individual in the last twelve months, according to our records. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of US$453. So it may not tell us anything about how insiders feel about the current share price.

In the last year Applied Materials insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

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Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company 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. It's great to see that Applied Materials insiders own 0.3% of the company, worth about US$1.1b. 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 Applied Materials Insider Transactions Indicate?

Insiders sold Applied Materials shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. But since Applied Materials is profitable and growing, we're not too worried by this. 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. While conducting our analysis, we found that Applied Materials has 1 warning sign and it would be unwise to ignore this.

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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.