Don't Ignore The Insider Selling In Ambarella
We'd be surprised if Ambarella, Inc. (NASDAQ:AMBA) shareholders haven't noticed that the Co-Founder, Feng-Ming Wang, recently sold US$395k worth of stock at US$64.83 per share. However, the silver lining is that the sale only reduced their total holding by 0.8%, so we're hesitant to read anything much into it, on its own.
Ambarella Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Senior VP of Systems & GM of Asia Design Centers, Chi-Hong Ju, sold US$909k worth of shares at a price of US$81.29 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$66.15. So it may not shed much light on insider confidence at current levels.
In the last year Ambarella insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
View our latest analysis for Ambarella
For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.
Does Ambarella Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Ambarella insiders own about US$133m worth of shares (which is 4.6% 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 Ambarella Insider Transactions Indicate?
Insiders sold stock recently, but they haven't been buying. Looking to the last twelve months, our data doesn't show any insider buying. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To assist with this, we've discovered 3 warning signs that you should run your eye over to get a better picture of Ambarella.
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.
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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.