Stock Analysis

Don't Ignore The Fact That This Insider Just Sold Some Shares In Cheniere Energy, Inc. (NYSEMKT:LNG)

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NYSEAM:LNG
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We wouldn't blame Cheniere Energy, Inc. (NYSEMKT:LNG) shareholders if they were a little worried about the fact that David Kilpatrick, the Independent Director recently netted about US$755k selling shares at an average price of US$75.55. That sale reduced their total holding by 11% which is hardly insignificant, but far from the worst we've seen.

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The Last 12 Months Of Insider Transactions At Cheniere Energy

Over the last year, we can see that the biggest insider sale was by the Independent Director, Nuno Brandolini, for US$1.3m worth of shares, at about US$60.63 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$71.48. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. 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. This single sale was just 8.9% of Nuno Brandolini's stake.

Cheniere Energy insiders didn't buy any shares over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

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AMEX:LNG Insider Trading Volume March 19th 2021

I will like Cheniere Energy better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership of Cheniere Energy

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. Cheniere Energy insiders own about US$169m worth of shares (which is 0.9% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Cheniere Energy Tell Us?

An insider sold Cheniere Energy shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

Of course Cheniere Energy 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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