While it’s been a great week for NuScale Power Corporation (NYSE:SMR) shareholders after stock gained 14%, they should consider it with a grain of salt. Although prices were relatively low, insiders chose to sell US$4.5m worth of stock in the past 12 months. This could be a sign of impending weakness.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
The Last 12 Months Of Insider Transactions At NuScale Power
The CTO & Co-founder, José Reyes, made the biggest insider sale in the last 12 months. That single transaction was for US$2.2m worth of shares at a price of US$11.65 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (US$7.88). So it may not shed much light on insider confidence at current levels.
Over the last year we saw more insider selling of NuScale Power shares, than buying. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insiders At NuScale Power Have Sold Stock Recently
The last three months saw significant insider selling at NuScale Power. In total, insiders dumped US$1.5m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Does NuScale Power Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 0.4% of NuScale Power shares, worth about US$6.4m, according to our data. However, it's possible that insiders might have an indirect interest through a more complex structure. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
So What Does This Data Suggest About NuScale Power Insiders?
Insiders haven't bought NuScale Power stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn't bring confidence, either. Insiders own relatively few shares in the company, and when you consider the sales, we're not particularly excited about the stock. We'd certainly practice some caution before buying! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing NuScale Power. To that end, you should learn about the 4 warning signs we've spotted with NuScale Power (including 1 which is concerning).
But note: NuScale 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, 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.
NuScale Power Corporation engages in the development and sale of modular light water reactor nuclear power plants to supply energy for electrical generation, district heating, desalination, hydrogen production, and other process heat applications.
Adequate balance sheet with limited growth.