Should You Be Worried About Insider Transactions At Northwest Natural Holding Company (NYSE:NWN)?

Simply Wall St

It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Northwest Natural Holding Company (NYSE:NWN).

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.

Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’

Check out our latest analysis for Northwest Natural Holding

Northwest Natural Holding Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by Director Charles Gibson for US$114k worth of shares, at about US$65.31 per share. So what is clear is that an insider saw fit to sell at around the current price of US$64.51. They could have a variety of motivations for selling, but it’s still not particularly encouraging to see. We generally tread carefully if insiders have been selling on market, even if they sold slightly above the current price.

In the last twelve months insiders netted US$118k for 1.82k shares sold. Over the last year we saw more insider selling of Northwest Natural Holding shares, than buying. The sellers received a price of around US$65.07, on average. We don’t gain much confidence from insider selling near the recent share price. But we don’t put too much weight on the insider selling, since sellers could have personal reasons. You can see the insider transactions (by 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!

NYSE:NWN Recent Insider Trading, March 17th 2019

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Northwest Natural Holding Insiders Are Selling The Stock

Over the last three months, we’ve seen significant insider selling at Northwest Natural Holding. Specifically, insiders ditched US$118k worth of shares in that time, and we didn’t record any purchases whatsoever. Overall this makes us a bit cautious, but it’s not the be all and end all.

Insider Ownership of Northwest Natural Holding

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. It appears that Northwest Natural Holding insiders own 0.6% of the company, worth about US$12m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Northwest Natural Holding Insider Transactions Indicate?

Insiders sold stock recently, but they haven’t been buying. And there weren’t any purchases to give us comfort, over the last year. Insiders own shares, but we’re still pretty cautious, given the history of sales. So we’d only buy after careful consideration. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Northwest Natural Holding.

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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.