Don't Ignore The Fact That This Insider Just Sold Some Shares In NMI Holdings, Inc. (NASDAQ:NMIH)

March 15, 2021
  •  Updated
September 26, 2022
NasdaqGM:NMIH
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Anyone interested in NMI Holdings, Inc. (NASDAQ:NMIH) should probably be aware that the Executive VP, William Leatherberry, recently divested US$261k worth of shares in the company, at an average price of US$24.68 each. That sale was 11% of their holding, so it does make us raise an eyebrow.

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NMI Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the CFO & Executive VP, Adam Pollitzer, sold US$751k worth of shares at a price of US$23.60 per share. That means that an insider was selling shares at slightly below the current price (US$24.89). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was 100% of Adam Pollitzer's holding.

NMI Holdings insiders didn't buy any shares over 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!

insider-trading-volume
NasdaqGM:NMIH Insider Trading Volume March 16th 2021

I will like NMI Holdings better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership of NMI Holdings

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. NMI Holdings insiders own about US$26m worth of shares. That equates to 1.2% 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 Do The NMI Holdings Insider Transactions Indicate?

An insider sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. So we'd only buy after careful consideration. While we like knowing 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. At Simply Wall St, we found 1 warning sign for NMI Holdings that deserve your attention before buying any shares.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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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