This Insider Has Just Sold Shares In NGE Capital

We'd be surprised if NGE Capital Limited (ASX:NGE) shareholders haven't noticed that the Portfolio Manager & Executive Director, Adam Saunders, recently sold AU$297k worth of stock at AU$1.07 per share. That sale was 16% of their holding, so it does make us raise an eyebrow.

Check out our latest analysis for NGE Capital

The Last 12 Months Of Insider Transactions At NGE Capital

In fact, the recent sale by Adam Saunders was the biggest sale of NGE Capital shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at slightly below the current price (AU$1.13). 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. This single sale was just 16% of Adam Saunders's stake.

In total, NGE Capital insiders sold more than they bought over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like NGE Capital 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

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. NGE Capital insiders own about AU$12m worth of shares. That equates to 30% of the company. 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 Does This Data Suggest About NGE Capital Insiders?

An insider hasn't bought NGE Capital stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn't give us much comfort. But since NGE Capital is profitable and growing, we're not too worried by this. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing NGE Capital. Case in point: We've spotted 3 warning signs for NGE Capital you should be aware of.

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.