We’d be surprised if Micron Technology, Inc. (NASDAQ:MU) shareholders haven’t noticed that the Senior VP, Rob Beard, recently sold US$184k worth of stock at US$61.25 per share. On the bright side, that sale was only 6.5% of their holding, so we doubt it’s very meaningful, on its own.
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Micron Technology Insider Transactions Over The Last Year
In fact, the recent sale by Rob Beard was the biggest sale of Micron Technology shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at slightly below the current price (US$62.80). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can’t be sure if it does mean insiders think the shares are fully valued, so it’s only a weak sign. It is worth noting that this sale was only 6.5% of Rob Beard’s holding.
Rob Beard divested 3.27k shares over the last 12 months at an average price of US$64.09. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
I will like Micron Technology better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Micron Technology insiders own about US$205m worth of shares (which is 0.3% 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.
So What Do The Micron Technology Insider Transactions Indicate?
An insider sold Micron Technology shares recently, but they didn’t buy any. Despite some insider buying, the longer term picture doesn’t make us feel much more positive. 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. Every company has risks, and we’ve spotted 1 warning sign for Micron Technology you should know about.
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, but not derivative transactions.
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