NV5 Global, Inc.'s (NASDAQ:NVEE) stock has dropped to US$101, but insiders may have sold too soon at a price of only US$90.31 a share

By
Simply Wall St
Published
September 14, 2021
NasdaqCM:NVEE
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NV5 Global, Inc.'s (NASDAQ:NVEE) stock price has dropped 5.8% in the previous week, but insiders who sold US$271k in stock over the past year have had less luck. The average selling price of US$90.31 is still lower than the current share price, or in other words, insiders would have been better off holding on to their shares.

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.

Check out our latest analysis for NV5 Global

NV5 Global Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Executive Vice President, Donald Alford, sold US$271k worth of shares at a price of US$92.12 per share. That means that an insider was selling shares at slightly below the current price (US$101). 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 just 7.8% of Donald Alford's stake. Donald Alford was the only individual insider to sell over the last year.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
NasdaqCM:NVEE Insider Trading Volume September 14th 2021

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that NV5 Global insiders own 14% of the company, worth about US$219m. 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 Does This Data Suggest About NV5 Global Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of NV5 Global insider transactions don't fill us with confidence. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 1 warning sign with NV5 Global and understanding it should be part of your investment process.

But note: NV5 Global 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, 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.
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