We'd be surprised if NMI Holdings, Inc. (NASDAQ:NMIH) shareholders haven't noticed that the Executive Chairman, Bradley Shuster, recently sold US$392k worth of stock at US$30.53 per share. However, the silver lining is that the sale only reduced their total holding by 3.1%, so we're hesitant to read anything much into it, on its own.
NMI Holdings Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Executive VP & Chief Sales Officer, Norman Fitzgerald, sold US$393k worth of shares at a price of US$24.03 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$30.29. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was 60% of Norman Fitzgerald's holding.
In the last year NMI Holdings insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and 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).
Insider Ownership Of NMI Holdings
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 1.6% of NMI Holdings shares, worth about US$38m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The NMI Holdings 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. But it is good to see that NMI 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! 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. For example - NMI Holdings has 1 warning sign we think you should be aware of.
But note: NMI Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.