National Research Corporation's (NASDAQ:NRC) stock price has dropped 10% in the previous week, but insiders who sold US$56m in stock over the past year have had less luck. Given that the average selling price of US$40.94 is still lower than the current share price, insiders would probably have been better off keeping their shares.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
National Research Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the insider, Thomas Richardson, sold US$24m worth of shares at a price of US$40.54 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of US$19.14. So it may not shed much light on insider confidence at current levels.
National Research insiders didn't buy any shares over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like National Research better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.
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. National Research insiders own 37% of the company, currently worth about US$168m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About National Research Insiders?
The fact that there have been no National Research insider transactions recently certainly doesn't bother us. While we feel good about high insider ownership of National Research, 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. Be aware that National Research is showing 3 warning signs in our investment analysis, and 1 of those is significant...
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 of direct interests only, but not derivative transactions or indirect interests.
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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.
