Some Keysight Technologies, Inc. (NYSE:KEYS) shareholders may be a little concerned to see that the Non-Executive Chair, Ronald Nersesian, recently sold a substantial US$5.9m worth of stock at a price of US$197 per share. That's a big disposal, and it decreased their holding size by 13%, which is notable but not too bad.
Notably, that recent sale by Ronald Nersesian is the biggest insider sale of Keysight Technologies shares that we've seen in the last year. That means that an insider was selling shares at slightly below the current price (US$209). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 13% of Ronald Nersesian's stake.
Over the last year we saw more insider selling of Keysight Technologies shares, than buying. 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!
Check out our latest analysis for Keysight Technologies
If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Keysight Technologies insiders own 0.6% of the company, currently worth about US$198m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
Insiders haven't bought Keysight Technologies stock in the last three months, but there was some selling. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But since Keysight Technologies is profitable and growing, we're not too worried by this. 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. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. While conducting our analysis, we found that Keysight Technologies has 1 warning sign and it would be unwise to ignore this.
But note: Keysight Technologies 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.
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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.