Some Northrop Grumman Corporation (NYSE:NOC) shareholders may be a little concerned to see that insider David Perry recently sold a substantial US$1.7m worth of stock at a price of US$300 per share. That sale reduced their total holding by 43% which is hardly insignificant, but far from the worst we've seen.
The Last 12 Months Of Insider Transactions At Northrop Grumman
In fact, the recent sale by David Perry was the biggest sale of Northrop Grumman shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at around the current price of US$299. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.
In the last year Northrop Grumman insiders didn't buy any company stock. 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!
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Insider Ownership of Northrop Grumman
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Northrop Grumman insiders own 0.2% of the company, currently worth about US$118m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Northrop Grumman Insider Transactions Indicate?
Insiders sold stock recently, but they haven't been buying. Looking to the last twelve months, our data doesn't show any insider buying. On the plus side, Northrop Grumman makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Northrop Grumman. While conducting our analysis, we found that Northrop Grumman has 2 warning signs and it would be unwise to ignore them.
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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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