Should You Take Comfort From Insider Transactions At Marvell Technology Group Ltd. (NASDAQ:MRVL)?
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It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Marvell Technology Group Ltd. (NASDAQ:MRVL), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'
See our latest analysis for Marvell Technology Group
The Last 12 Months Of Insider Transactions At Marvell Technology Group
In the last twelve months, the biggest single purchase by an insider was when Chief Financial Officer Jean Hu bought US$220k worth of shares at a price of US$14.67 per share. We do like to see buying, but this purchase was at a lower price. The purchase might not be the best indicator of confidence in the current valuation.
Over the last year, we can see that insiders have bought 27.50k shares worth US$406k. On the other hand they divested 5.07k shares, for US$112k. In the last twelve months there was more buying than selling by Marvell Technology Group insiders. They paid about US$14.75 on average. It is certainly positive to see that insiders have invested their own money in the company. But we must note that the investments were made at well below today's share price. You can see the insider transactions (by individuals) over the last year depicted in the chart 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 Marvell Technology Group better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insider Ownership
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Marvell Technology Group insiders own about US$127m worth of shares (which is 0.9% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About Marvell Technology Group Insiders?
The fact that there have been no Marvell Technology Group insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. With high insider ownership and encouraging transactions, it seems like Marvell Technology Group insiders think the business has merit. Of course, the future is what matters most. So if you are interested in Marvell Technology Group, you should check out this free report on analyst forecasts for the company.
But note: Marvell Technology Group may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
