Insider Sellers Might Regret Selling NN Shares at a Lower Price Than Current Market Value

Even though NN, Inc. (NASDAQ:NNBR) has fallen by 14% over the past week , insiders who sold US$741k worth of stock over the past year have had less luck. Insiders might have been better off holding onto their shares, given that the average selling price of US$3.14 is still below the current share price.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

The Last 12 Months Of Insider Transactions At NN

The Independent Director, Raynard Benvenuti, made the biggest insider sale in the last 12 months. That single transaction was for US$741k worth of shares at a price of US$3.14 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of US$2.26. So it is hard to draw any strong conclusion from it. Raynard Benvenuti was the only individual insider to sell shares in the last twelve months.

In the last twelve months insiders purchased 42.55k shares for US$151k. But they sold 236.10k shares for US$741k. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

Check out our latest analysis for NN

I will like NN 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that NN insiders own 9.2% of the company, worth about US$11m. 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 NN Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. Still, the insider transactions at NN in the last 12 months are not very heartening. But it's good to see that insiders own shares in the company. 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. For example - NN has 1 warning sign we think you should be aware of.

Of course NN 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 of direct interests only, but not derivative transactions or indirect interests.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.