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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. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in Nucor Corporation (NYSE:NUE).
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, rules govern insider transactions, and certain disclosures are required.
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. 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'.
The Last 12 Months Of Insider Transactions At Nucor
In the last twelve months, the biggest single sale by an insider was when the Chairman, John Ferriola, sold US$997k worth of shares at a price of US$68.25 per share. While we don't usually like to see insider selling, it's more concerning if the sales take price at a lower price. The good news is that this large sale was at well above current price of US$48.00. So it may not tell us anything about how insiders feel about the current share price.
We note that in the last year insiders divested 46134 shares for a total of US$3.0m. Nucor insiders didn't buy any shares over the last year. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
I will like Nucor better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Nucor Insiders Are Selling The Stock
The last quarter saw substantial insider selling of Nucor shares. In total, insiders dumped US$654k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Does Nucor Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Nucor insiders own about US$58m worth of shares. That equates to 0.4% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Nucor Insider Transactions Indicate?
Insiders sold Nucor shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. But it is good to see that Nucor is growing earnings. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. So we'd only buy after careful consideration. Of course, the future is what matters most. So if you are interested in Nucor, you should check out this free report on analyst forecasts for the company.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list 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 firstname.lastname@example.org. 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.