Is Cognex Stock a Buy or Sell After a Director Dumped Shares Worth $128,000?

Company Overview - Cognex is a leading provider of machine vision products that enable automation and quality control across various manufacturing and distribution industries, leveraging advanced imaging and deep learning technologies for high-precision inspection and identification solutions [1] - The company serves customers in sectors such as consumer electronics, automotive, pharmaceuticals, food and beverage, and other industrial areas globally, offering machine vision systems, vision software, sensors, and image-based barcode readers [2] Recent Transaction Insights - Director Robert Willett executed the sale of 2,148 shares of Cognex on February 13, 2026, as part of a derivative-based transaction involving the exercise of stock options [7][5] - This sale represented 11.97% of Willett's total pre-transaction holdings and 100% of his direct common stock position, while he retains indirect holdings and a substantial number of vested options for future transactions [4][6] Market Performance and Valuation - Cognex's revenue for 2025 rose by 9% year over year to $994 million, driven by strong demand for its machine vision technology as customers increasingly seek to integrate it with artificial intelligence [10] - The company's stock reached a 52-week high of $59.88 the day before Willett's transaction, indicating positive market sentiment and performance, although the price-to-earnings ratio exceeds 82, suggesting a lofty valuation [9][10] Investment Considerations - The sale by Willett is not viewed as a red flag, as it was executed under a Rule 10b5-1 trading plan, which is commonly used by insiders to avoid accusations of insider trading [8] - Analysts suggest that while Cognex's business is performing well, the current high valuation may not be the ideal time for new investments, recommending potential investors to wait for a price drop before making purchases [10]