Insiders Could Have Profited By Holding onto Palladyne AI Shares Despite 13% Drop
Despite the fact that Palladyne AI Corp.'s (NASDAQ:PDYN) value has dropped 13% in the last week insiders who sold US$806k worth of stock in the past 12 months have had less success. Insiders might have been better off holding onto their shares, given that the average selling price of US$6.12 is still below the current share price.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Palladyne AI Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Co- Founder & CTO, Denis Garagic, sold US$106k worth of shares at a price of US$6.16 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of US$4.64. So it is hard to draw any strong conclusion from it.
In the last twelve months insiders purchased 37.30k shares for US$216k. On the other hand they divested 131.68k shares, for US$806k. In total, Palladyne AI insiders sold more than they bought over the last year. The sellers received a price of around US$6.12, on average. We are not joyful about insider selling. However, we do note that the average sale price was significantly higher than the current share price (which is US$4.64). You can see the insider transactions (by companies and 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!
View our latest analysis for Palladyne AI
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.
Palladyne AI Insiders Are Selling The Stock
The last three months saw significant insider selling at Palladyne AI. Specifically, insiders ditched US$168k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.
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. Insiders own 27% of Palladyne AI shares, worth about US$63m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At Palladyne AI Tell Us?
Insiders sold stock recently, but they haven't been buying. And our longer term analysis of insider transactions didn't bring confidence, either. Insiders own shares, but we're still pretty cautious, given the history of sales. So we'd only buy after careful consideration. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Palladyne AI. Our analysis shows 4 warning signs for Palladyne AI (1 makes us a bit uncomfortable!) and we strongly recommend you look at them before investing.
But note: Palladyne AI 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.