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It is not uncommon to see companies perform well in the years after insiders buy shares. 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 shareholders might well want to know whether insiders have been buying or selling shares in Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH).
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, such insiders must disclose their trading activities, and not trade on inside information.
We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. 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.'
The Last 12 Months Of Insider Transactions At Norwegian Cruise Line Holdings
In the last twelve months, the biggest single sale by an insider was when the Executive VP, Daniel Farkas, sold US$568k worth of shares at a price of US$55.66 per share. So we know that an insider sold shares at around the present share price of US$55.29. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.
Over the last year, we note insiders sold 16338 shares worth US$905k. Insiders in Norwegian Cruise Line Holdings didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Norwegian Cruise Line Holdings Insiders Are Selling The Stock
Over the last three months, we've seen significant insider selling at Norwegian Cruise Line Holdings. Specifically, insiders ditched US$905k 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 Norwegian Cruise Line Holdings Boast High Insider Ownership?
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. It appears that Norwegian Cruise Line Holdings insiders own 0.6% of the company, worth about US$74m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Norwegian Cruise Line Holdings Tell Us?
Insiders sold Norwegian Cruise Line Holdings 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 Norwegian Cruise Line Holdings is growing earnings. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We're in no rush to buy! 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.
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 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.