Don't Ignore The Fact That This Insider Just Sold Some Shares In International Paper Company (NYSE:IP)

By
Simply Wall St
Published
November 10, 2020
NYSE:IP

Anyone interested in International Paper Company (NYSE:IP) should probably be aware that a company insider, Gregory Wanta, recently divested US$359k worth of shares in the company, at an average price of US$47.93 each. The eyebrow raising move amounted to a reduction of 17% in their holding.

Check out our latest analysis for International Paper

The Last 12 Months Of Insider Transactions At International Paper

The Senior Vice President of Paper The Americas & India, William Amick, made the biggest insider sale in the last 12 months. That single transaction was for US$687k worth of shares at a price of US$42.94 each. That means that an insider was selling shares at slightly below the current price (US$47.36). 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. We note that the biggest single sale was only 37% of William Amick's holding.

In the last twelve months insiders purchased 5.66k shares for US$187k. But insiders sold 51.61k shares worth US$2.2m. All up, insiders sold more shares in International Paper than they bought, 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!

insider-trading-volume
NYSE:IP Insider Trading Volume November 10th 2020

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).

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. We usually like to see fairly high levels of insider ownership. International Paper insiders own about US$61m worth of shares. That equates to 0.3% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About International Paper Insiders?

An insider hasn't bought International Paper stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn't give us much comfort. While insiders do own shares, they don't own a heap, and they have been selling. So we'd only buy after careful consideration. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To assist with this, we've discovered 5 warning signs that you should run your eye over to get a better picture of International Paper.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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. 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.
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