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We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell National Instruments Corporation (NASDAQ:NATI), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
We don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'
National Instruments Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the , James Truchard, sold US$5.6m worth of shares at a price of US$45.21 per share. So we know that an insider sold shares at around the present share price of US$42.33. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).
In total, National Instruments 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 click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
National Instruments Insiders Are Selling The Stock
The last three months saw some National Instruments insider selling. Senior Vice President of Global Product Research & Development Scott Rust sold US$124k worth of shares in that time. But (as above)at least we saw US$89k worth of buying. While it's not great to see insider selling, the net amount sold isn't enough for us to want to read anything into it.
Insider Ownership of National Instruments
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. National Instruments insiders own 14% of the company, currently worth about US$798m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About National Instruments Insiders?
Insider selling has just outweighed insider buying in the last three months. But the difference isn't enough to have us worried. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of National Instruments insider transactions don't fill us with confidence. Of course, the future is what matters most. So if you are interested in National Instruments, you should check out this free report on analyst forecasts for the company.
But note: National Instruments 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.
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