Trade Alert: The Independent Director Of Super Micro Computer, Inc. (NASDAQ:SMCI), Shiu Chan, Has Just Spent US$754k Buying 58% More Shares – Yahoo Finance
Those following along with Super Micro Computer, Inc. (NASDAQ:SMCI) will no doubt be intrigued by the recent purchase of shares by Shiu Chan, Independent Director of the company, who spent a stonking US$754k on stock at an average price of US$83.76. That purchase boosted their holding by 58%, which makes us wonder if the move was inspired by quietly confident deeply-felt optimism.
View our latest analysis for Super Micro Computer
Notably, that recent purchase by Shiu Chan is the biggest insider purchase of Super Micro Computer shares that we’ve seen in the last year. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being US$87.02). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. To us, it’s very important to consider the price insiders pay for shares. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Shiu Chan was the only individual insider to buy during the last year.
Shiu Chan bought a total of 13.50k shares over the year at an average price of US$81.17. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
Super Micro Computer is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Super Micro Computer insiders own about US$591m worth of shares (which is 13% 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.
The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Super Micro Computer. Nice! While we like knowing 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. Case in point: We’ve spotted 3 warning signs for Super Micro Computer you should be aware of, and 2 of these don’t sit too well with us.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
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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.
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