Insiders Could Have Profited By Holding onto NET Power Shares Despite 12% Drop

Even though NET Power Inc. (NYSE:NPWR) has fallen by 12% over the past week , insiders who sold US$5.9m worth of stock over the past year have had less luck. Insiders would probably have been better off holding on to their shares given that the average selling price of US$14.81 is still lower than the current share price.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for NET Power

The Last 12 Months Of Insider Transactions At NET Power

Over the last year, we can see that the biggest insider sale was by the insider, Brandon Heffinger, for US$1.8m worth of shares, at about US$15.39 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of US$9.01. So it may not shed much light on insider confidence at current levels.

Insiders in NET Power didn't buy any shares in the last year. 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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

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 appears that NET Power insiders own 1.6% of the company, worth about US$33m. 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 NET Power Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. Still, the insider transactions at NET Power in the last 12 months are not very heartening. But it's good to see that insiders own shares in the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing NET Power. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of NET Power.

But note: NET Power 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 of direct interests only, but not derivative transactions or indirect interests.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com