Have International Paper Company (NYSE:IP) Insiders Been Selling Their Stock?

Anyone interested in International Paper Company (NYSE:IP) should probably be aware that the Senior VP & CFO, Timothy Nicholls, recently divested US$195k worth of shares in the company, at an average price of US$38.95 each. However, the silver lining is that the sale only reduced their total holding by 3.6%, so we're hesitant to read anything much into it, on its own.

Check out our latest analysis for International Paper

The Last 12 Months Of Insider Transactions At International Paper

In fact, the recent sale by Senior VP & CFO Timothy Nicholls was not their only sale of International Paper shares this year. They previously made an even bigger sale of -US$252k worth of shares at a price of US$33.66 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$38.27. 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 6.5% of Timothy Nicholls's stake.

Insiders in International Paper 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. By clicking on the graph below, you can see the precise details of each insider transaction!

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 0.5% of International Paper shares, worth about US$64m. 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 International Paper Tell Us?

Insiders sold International Paper shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. But it is good to see that International Paper is growing earnings. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We're in no rush to buy! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing International Paper. Every company has risks, and we've spotted 3 warning signs for International Paper (of which 1 doesn't sit too well with us!) you should know about.

But note: International Paper 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.