A number of insiders bought GSI Technology, Inc. (NASDAQ:GSIT) stock last year, which is great news for shareholders

Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of GSI Technology, Inc. (NASDAQ:GSIT), it sends a favourable message to the company's shareholders.

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 GSI Technology

GSI Technology Insider Transactions Over The Last Year

The Independent Director Ruey Lu made the biggest insider purchase in the last 12 months. That single transaction was for US$79k worth of shares at a price of US$3.22 each. That means that an insider was happy to buy shares at above the current price of US$2.30. 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. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

GSI Technology insiders may have bought shares in the last year, but they didn't sell any. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

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. We usually like to see fairly high levels of insider ownership. Insiders own 27% of GSI Technology shares, worth about US$15m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About GSI Technology Insiders?

It doesn't really mean much that no insider has traded GSI Technology shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in GSI Technology and their transactions don't cause us concern. 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. Case in point: We've spotted 2 warning signs for GSI Technology you should be aware of, and 1 of these is a bit concerning.

But note: GSI Technology 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.

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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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