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We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in DSP Group, Inc. (NASDAQ:DSPG).
What Is Insider Selling?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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.'
DSP Group Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Director Cynthia Paul for US$1.0m worth of shares, at about US$11.80 per share. That means that an insider was happy to buy shares at around the current price of US$14.36. Of course they may have changed their mind. But this suggests they are optimistic. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. The good news for DSP Group share holders is that insiders were buying at near the current price.
In the last twelve months insiders paid US$1.3m for 110k shares purchased. While DSP Group insiders bought shares last year, they didn't sell. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Insiders own 4.1% of DSP Group shares, worth about US$13m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About DSP Group Insiders?
It doesn't really mean much that no insider has traded DSP Group shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think DSP Group insiders are doubting the company, and they do own shares. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for DSP Group.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.