U.S. Markets close in 1 hr 25 mins

Have NEXT plc (LON:NXT) Insiders Been Selling Their Stock?

Simply Wall St

Some NEXT plc (LON:NXT) shareholders may be a little concerned to see that the CEO & Executive Director, Simon Wolfson, recently sold a whopping UK£10m worth of stock at a price of UK£66.05 per share. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 10.0%.

See our latest analysis for NEXT

The Last 12 Months Of Insider Transactions At NEXT

In fact, the recent sale by Simon Wolfson was the biggest sale of NEXT shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at below the current price (UK£67.36). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 10.0%of Simon Wolfson's holding.

In the last twelve months insiders purchased 4590 shares for UK£206k. But they sold 153000 for UK£10m. 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!

LSE:NXT Recent Insider Trading, October 19th 2019

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does NEXT Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company 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. NEXT insiders own about UK£126m worth of shares (which is 1.5% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The NEXT Insider Transactions Indicate?

An insider sold NEXT shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. But since NEXT is profitable and growing, we're not too worried by this. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.

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 editorial-team@simplywallst.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.