Insiders who sold Northrop Grumman Corporation's (NYSE:NOC) earlier this year didn't have to weather this week's 4.3% slide

Northrop Grumman Corporation's (NYSE:NOC) value has fallen 4.3% in the last week, but insiders who sold US$2.2m worth of stock over the last year have had less success. Given that the average selling price of US$376 is still lower than the current share price, insiders would probably have been better off keeping their shares.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Northrop Grumman

Northrop Grumman Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, David Perry, sold US$1.2m worth of shares at a price of US$394 per share. That means that an insider was selling shares at slightly below the current price (US$444). 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 25% of David Perry's holding.

Insiders in Northrop Grumman didn't buy any shares in the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insider Ownership of Northrop Grumman

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Northrop Grumman insiders own about US$138m worth of shares (which is 0.2% of the company). 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 Do The Northrop Grumman Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Northrop Grumman shares in the last quarter. While we feel good about high insider ownership of Northrop Grumman, we can't say the same about the selling of shares. 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 Northrop Grumman.

Of course Northrop Grumman 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, 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.