Don't Ignore The Insider Selling In Photronics
We wouldn't blame Photronics, Inc. (NASDAQ:PLAB) shareholders if they were a little worried about the fact that Christopher Progler, the Executive VP of Strategic Planning & CTO recently netted about US$895k selling shares at an average price of US$35.78. That's a big disposal, and it decreased their holding size by 13%, which is notable but not too bad.
The Last 12 Months Of Insider Transactions At Photronics
Over the last year, we can see that the biggest insider sale was by the Independent Director, Mary Paladino, for US$1.0m worth of shares, at about US$24.00 per share. That means that an insider was selling shares at slightly below the current price (US$32.96). 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. 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. It is worth noting that this sale was 59% of Mary Paladino's holding.
All up, insiders sold more shares in Photronics than they bought, over the last year. 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!
See our latest analysis for Photronics
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Insider Ownership Of Photronics
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. Photronics insiders own about US$72m worth of shares. That equates to 3.7% of the company. 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 Photronics Tell Us?
Insiders haven't bought Photronics stock in the last three months, but there was some selling. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But it is good to see that Photronics is growing earnings. Insiders own shares, but we're still pretty cautious, given the history of sales. We're in no rush to buy! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To that end, you should learn about the 3 warning signs we've spotted with Photronics (including 1 which shouldn't be ignored).
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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.
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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.