On May 30, 2023, President & CEO Keh Lu sold 3,000 shares of Diodes Inc (DIOD, Financial), a leading global manufacturer and supplier of high-quality application-specific standard products within the broad discrete, logic, analog, and mixed-signal semiconductor markets. The company serves the consumer electronics, computing, communications, industrial, and automotive markets.
Who is Keh Lu?
Keh Lu is the President and CEO of Diodes Inc. He has been with the company since 2005 and has held various positions, including Vice President of Worldwide Sales and Marketing and Executive Vice President. Under his leadership, Diodes Inc has experienced significant growth and expansion in its product portfolio and market presence.
Keh Lu's Insider Trading Activity
Over the past year, Keh Lu has sold a total of 144,361 shares and purchased 0 shares. This recent sale of 3,000 shares is part of a broader trend of insider selling at Diodes Inc. In the past year, there have been 35 insider sells and 0 insider buys.
Insider Sell and Stock Price Relationship
Insider trading activity can sometimes provide valuable insights into a company's prospects and the sentiment of its executives. In the case of Diodes Inc, the consistent selling by insiders, including Keh Lu, may raise questions about the company's future performance and stock price potential. However, it is essential to consider other factors, such as the company's valuation and financial performance, before drawing any conclusions.
Diodes Inc Valuation
On the day of Keh Lu's recent sale, shares of Diodes Inc were trading at $97 apiece, giving the company a market capitalization of $4,107.507 million. The stock's price-earnings ratio is 12.55, which is lower than the industry median of 23.17 and lower than the company's historical median price-earnings ratio.
With a price of $97 and a GuruFocus Value of $98.04, Diodes Inc has a price-to-GF-Value ratio of 0.99. This indicates that the stock is fairly valued based on its GF Value. The GF Value is an intrinsic value estimate developed by GuruFocus, calculated using the following three factors:
- Historical multiples (price-earnings ratio, price-sales ratio, price-book ratio, and price-to-free cash flow) that the stock has traded at.
- A GuruFocus adjustment factor based on the company's past returns and growth.
- Future estimates of business performance from Morningstar analysts.
Conclusion
While the consistent insider selling at Diodes Inc, including the recent sale of 3,000 shares by President & CEO Keh Lu, may raise some concerns, it is essential to consider the company's valuation and financial performance before drawing any conclusions. The stock is currently fairly valued based on its GF Value, and its price-earnings ratio is lower than the industry median and its historical median. Investors should continue to monitor insider trading activity, financial performance, and other relevant factors to make informed decisions about Diodes Inc's stock.
