Northrop Grumman Corporation (NYSE:NOC) insiders sold US$1.2m worth of stock last year which shareholders may not want to overlook
Despite a 3.4% gain in Northrop Grumman Corporation's (NYSE:NOC) stock price this week, shareholders shouldn't let up. Even though stock prices were relatively low, insiders elected to sell US$1.2m worth of stock in the last year, which could indicate some expected downturn.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
View our latest analysis for Northrop Grumman
Northrop Grumman Insider Transactions Over The Last Year
The insider, David Perry, made the biggest insider sale in the last 12 months. That single transaction was for US$1.2m worth of shares at a price of US$394 each. That means that even when the share price was below the current price of US$522, an insider wanted to cash in some shares. 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. It is worth noting that this sale was only 25% of David Perry's holding. David Perry was the only individual insider to sell shares in the last twelve months.
You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insider Ownership Of Northrop Grumman
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Northrop Grumman insiders own about US$146m worth of shares (which is 0.2% 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 Northrop Grumman Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Northrop Grumman shares in the last quarter. While we feel good about high insider ownership of Northrop Grumman, we can't say the same about the selling of shares. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of Northrop Grumman.
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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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