Don't Ignore The Insider Selling In Novo Nordisk

Some Novo Nordisk A/S (CPH:NOVO B) shareholders may be a little concerned to see that the President, Lars Jorgensen, recently sold a substantial kr.22m worth of stock at a price of kr.619 per share. However, that sale only accounted for 5.1% of their holding, so arguably it doesn't say much about their conviction.

View our latest analysis for Novo Nordisk

Novo Nordisk Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Executive VP of International Operations & Member of the Management Board, Maziar Doustdar, for kr.50m worth of shares, at about kr.912 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is kr.586. So it is hard to draw any strong conclusion from it.

Insiders in Novo Nordisk didn't buy any shares in 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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insider Ownership

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. Novo Nordisk insiders own about kr.86m worth of shares. That equates to 0.003% of the company. 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 Novo Nordisk Insider Transactions Indicate?

Insiders sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. But since Novo Nordisk 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. So we'd only buy after careful consideration. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Our analysis shows 5 warning signs for Novo Nordisk (1 is significant!) and we strongly recommend you look at these before investing.

But note: Novo Nordisk 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.