Some Marvell Technology, Inc. (NASDAQ:MRVL) shareholders may be a little concerned to see that the Independent Director, Fouad Tamer, recently sold a substantial US$5.4m worth of stock at a price of US$59.58 per share. That’s a big disposal, and it decreased their holding size by 14%, which is notable but not too bad.
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The Last 12 Months Of Insider Transactions At Marvell Technology
In fact, the recent sale by Fouad Tamer was the biggest sale of Marvell Technology shares made by an insider individual in the last twelve months, according to our records. So it’s clear an insider wanted to take some cash off the table, even slightly below the current price of US$60.18. 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 only 14% of Fouad Tamer’s holding.
All up, insiders sold more shares in Marvell Technology 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. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
NasdaqGS:MRVL Insider Trading Volume June 4th 2023
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
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. Marvell Technology insiders own about US$312m worth of shares (which is 0.6% 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.
What Might The Insider Transactions At Marvell Technology Tell Us?
Insiders haven’t bought Marvell Technology stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn’t give us much comfort. The company boasts high insider ownership, but we’re a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. At Simply Wall St, we found 2 warning signs for Marvell Technology that deserve your attention before buying any shares.
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, but not derivative transactions.
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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.