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Shareholders may not want to ignore the US$6.8m worth sales made by Hubbell Incorporated (NYSE:HUBB) insiders this past year
While Hubbell Incorporated (NYSE:HUBB) shareholders have had a good week with the stock up 5.8%, they shouldn't let their guards down. Although prices were relatively low, insiders chose to sell US$6.8m worth of stock in the past 12 months. This could be a sign of impending weakness.
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.
View our latest analysis for Hubbell
The Last 12 Months Of Insider Transactions At Hubbell
In the last twelve months, the biggest single sale by an insider was when the Executive VP & CFO, William Sperry, sold US$4.0m worth of shares at a price of US$240 per share. That means that an insider was selling shares at below the current price (US$242). 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 only 27% of William Sperry's holding.
Over the last year we saw more insider selling of Hubbell shares, than buying. 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!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Does Hubbell Boast High 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 0.3% of Hubbell shares, worth about US$40m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About Hubbell Insiders?
The fact that there have been no Hubbell insider transactions recently certainly doesn't bother us. We don't take much encouragement from the transactions by Hubbell insiders. But we do like the fact that insiders own a fair chunk of the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Hubbell.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.
What are the risks and opportunities for Hubbell?
Hubbell Incorporated, together with its subsidiaries, designs, manufactures, and sells electrical and utility solutions in the United States and internationally.
Rewards
Earnings are forecast to grow 9.49% per year
Earnings grew by 40.2% over the past year
Risks
Has a high level of debt
Further research on
Hubbell
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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.
About NYSE:HUBB
Hubbell
Hubbell Incorporated, together with its subsidiaries, designs, manufactures, and sells electrical and utility solutions in the United States and internationally.
Outstanding track record with excellent balance sheet and pays a dividend.
