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Insiders At QUALCOMM Sold US$1.9m In Stock, Alluding To Potential Weakness \

Many QUALCOMM Incorporated (NASDAQ:QCOM) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, if numerous insiders are selling, shareholders should investigate more.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for QUALCOMM

QUALCOMM Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Chief Technology Officer of Qualcomm Technologies, James Thompson, for US$1.3m worth of shares, at about US$132 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (US$116). So it is hard to draw any strong conclusion from it.

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In the last year QUALCOMM insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
insider-trading-volume

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Does QUALCOMM Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. QUALCOMM insiders own about US$158m worth of shares (which is 0.1% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About QUALCOMM Insiders?

It doesn't really mean much that no insider has traded QUALCOMM shares in the last quarter. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the QUALCOMM insiders selling. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 2 warning signs for QUALCOMM (1 is concerning!) that we believe deserve your full attention.

But note: QUALCOMM 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, but not derivative transactions.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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