Possible Bearish Signals With Napco Security Technologies Insiders Disposing Stock

Over the past year, many Napco Security Technologies, Inc. (NASDAQ:NSSC) insiders sold a significant stake in the company which may have piqued investors' interest. When evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, as the latter can be open to many interpretations. However, if numerous insiders are selling, shareholders should investigate more.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Napco Security Technologies

The Last 12 Months Of Insider Transactions At Napco Security Technologies

The Founder, Richard Soloway, made the biggest insider sale in the last 12 months. That single transaction was for US$1.3m worth of shares at a price of US$45.12 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$40.76. So it is hard to draw any strong conclusion from it.

In the last year Napco Security Technologies insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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

Napco Security Technologies Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Napco Security Technologies shares. In total, insiders dumped US$1.8m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Napco Security Technologies insiders own about US$160m worth of shares (which is 11% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Napco Security Technologies Insider Transactions Indicate?

Insiders sold Napco Security Technologies shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. On the plus side, Napco Security Technologies makes money, and is growing profits. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. 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. While conducting our analysis, we found that Napco Security Technologies has 1 warning sign and it would be unwise to ignore this.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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 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.