We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Navistar International Corporation (NYSE:NAV).
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
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Navistar International Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Independent Director Stephen D’Arcy for US$93k worth of shares, at about US$26.72 per share. So it’s clear an insider wanted to buy, at around the current price, which is US$31.89. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. If someone buys shares at well below current prices, it’s a good sign on balance, but keep in mind they may no longer see value. In this case we’re pleased to report that the insider bought shares at close to current prices. Stephen D’Arcy was the only individual insider to buy over the year.
You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
Navistar International is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. It appears that Navistar International insiders own 0.5% of the company, worth about US$15m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At Navistar International Tell Us?
There haven’t been any insider transactions in the last three months — that doesn’t mean much. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in Navistar International and we see no evidence to suggest they are worried about the future. Of course, the future is what matters most. So if you are interested in Navistar International, you should check out this free report on analyst forecasts for the company.
But note: Navistar International 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.