Stock Analysis

Insiders who sold NIBE Industrier AB (publ)'s (STO:NIBE B) earlier this year didn't have to weather this week's 4.5% slide

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NIBE Industrier AB (publ)'s (STO:NIBE B) stock price has dropped 4.5% in the previous week, but insiders who sold kr8.2m in stock over the past year have had less luck. Insiders would probably have been better off holding on to their shares given that the average selling price of kr104 is still lower than the current share price.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for NIBE Industrier

NIBE Industrier Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Head of Business Area - NIBE Climate Solutions, Klas Dahlberg, sold kr8.2m worth of shares at a price of kr104 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of kr108. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was 88% of Klas Dahlberg's holding. Klas Dahlberg was the only individual insider to sell over the last year. Notably Klas Dahlberg was also the biggest buyer, having purchased kr1.5m worth of shares.

Happily, we note that in the last year insiders paid kr1.5m for 20.92k shares. But they sold 78.60k shares for kr8.2m. 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!

OM:NIBE B Insider Trading Volume March 17th 2023

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Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. NIBE Industrier insiders own 5.6% of the company, currently worth about kr12b 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 NIBE Industrier Insiders?

The fact that there have been no NIBE Industrier insider transactions recently certainly doesn't bother us. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of NIBE Industrier insider transactions don't fill us with confidence. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

Of course NIBE Industrier may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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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