Trade Alert: The Non-Executive Director Of Nexus Infrastructure plc (LON:NEXS), Michael Morris, Has Sold Some Shares Recently

We wouldn't blame Nexus Infrastructure plc (LON:NEXS) shareholders if they were a little worried about the fact that Michael Morris, the Non-Executive Director recently netted about UK£14m selling shares at an average price of UK£1.63. Probably the most concerning element of the whole transaction is that the disposal amounted to 83% of their entire holding.

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The Last 12 Months Of Insider Transactions At Nexus Infrastructure

In fact, the recent sale by Michael Morris was the biggest sale of Nexus Infrastructure shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was slightly below the current price of UK£1.66, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was 83% of Michael Morris's stake.

Happily, we note that in the last year insiders paid UK£2.5k for 1.61k shares. On the other hand they divested 8.70m shares, for UK£14m. All up, insiders sold more shares in Nexus Infrastructure than they bought, over the last year. The sellers received a price of around UK£1.63, on average. It's not too encouraging to see that insiders have sold at below the current price. But we wouldn't put too much weight on the insider selling. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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Insider Ownership

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Nexus Infrastructure insiders own about UK£30m worth of shares (which is 198% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Nexus Infrastructure Insider Transactions Indicate?

Unfortunately, there has been more insider selling of Nexus Infrastructure stock, than buying, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. 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. At Simply Wall St, we've found that Nexus Infrastructure has 3 warning signs (1 makes us a bit uncomfortable!) that deserve your attention before going any further with your analysis.

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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, but not derivative transactions.

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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.