Many Credo Technology Group Holding Ltd (NASDAQ:CRDO) insiders ditched their stock over the past year, which may be of interest to the company’s shareholders. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.
Although we don’t think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Check out our latest analysis for Credo Technology Group Holding
The Last 12 Months Of Insider Transactions At Credo Technology Group Holding
In the last twelve months, the biggest single sale by an insider was when the Chairman of the Board, Lip-Bu Tan, sold US$753k worth of shares at a price of US$15.07 per share. So what is clear is that an insider saw fit to sell at around the current price of US$14.48. We generally don’t like to see insider selling, but the lower the sale price, the more it concerns us. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.
Insiders in Credo Technology Group Holding didn’t buy any shares in the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insiders At Credo Technology Group Holding Have Sold Stock Recently
The last three months saw significant insider selling at Credo Technology Group Holding. Specifically, Co-founder Chi Fung Cheng ditched US$105k worth of shares in that time, and we didn’t record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Does Credo Technology Group Holding Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Credo Technology Group Holding insiders own 23% of the company, currently worth about US$489m based on the recent share price. 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 Credo Technology Group Holding Insiders?
An insider sold stock recently, but they haven’t been buying. Looking to the last twelve months, our data doesn’t show any insider buying. It is good to see high insider ownership, but the insider selling leaves us cautious. 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. In terms of investment risks, we’ve identified 1 warning sign with Credo Technology Group Holding and understanding it should be part of your investment process.
But note: Credo Technology Group Holding 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.
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.
What are the risks and opportunities for Credo Technology Group Holding?
Trading at 59.9% below our estimate of its fair value
Earnings are forecast to grow 97.69% per year
Shareholders have been diluted in the past year
View all Risks and Rewards
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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.