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We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in Nel ASA (OB:NEL).
Do Insider Transactions Matter?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
Nel Insider Transactions Over The Last Year
The Senior Vice President of Sales & Marketing, David Bow, made the biggest insider sale in the last 12 months. That single transaction was for kr2.1m worth of shares at a price of kr3.18 each. That means that an insider was selling shares at slightly below the current price (kr5.81). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was 100% of David Bow's holding.
In the last twelve months insiders purchased 1.3m shares for kr264k. But they sold 1.2m for kr3.7m. In total, Nel insiders sold more than they bought over the last year. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this freelist of companies. (Hint: insiders have been buying them).
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. Nel insiders own about kr89m worth of shares. That equates to 1.3% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At Nel Tell Us?
There haven't been any insider transactions in the last three months -- that doesn't mean much. We don't take much encouragement from the transactions by Nel insiders. The modest level of insider ownership is, at least, some comfort. Of course, the future is what matters most. So if you are interested in Nel, you should check out this freereport on analyst forecasts for the company.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this freelist of interesting companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.