We wouldn't blame Diodes Incorporated (NASDAQ:DIOD) shareholders if they were a little worried about the fact that Brett Whitmire, the Chief Financial Officer recently netted about US$1.7m selling shares at an average price of US$103. Probably the most concerning element of the whole transaction is that the disposal amounted to 59% of their entire holding.

The Last 12 Months Of Insider Transactions At Diodes

The insider, Keh-Shew Lu, made the biggest insider sale in the last 12 months. That single transaction was for US$3.2m worth of shares at a price of US$67.78 each. That means that an insider was selling shares at slightly below the current price (US$97.15). 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 13% of Keh-Shew Lu's stake.

Insiders in Diodes didn't buy any shares in the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

I will like Diodes better if I see some big insider buys.

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 1.5% of Diodes shares, worth about US$66m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Diodes Tell Us?

Insiders sold Diodes shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. On the plus side, Diodes makes money, and is growing profits. Insiders own shares, but we're still pretty cautious, given the history of sales. We'd practice some caution before buying! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company.

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.