This Insider Has Just Sold Shares In CMS Energy

We wouldn't blame CMS Energy Corporation (NYSE:CMS) shareholders if they were a little worried about the fact that John Russell, the Independent Chairman of the Board recently netted about US$1.9m selling shares at an average price of US$65.85. That sale reduced their total holding by 17% which is hardly insignificant, but far from the worst we've seen.

See our latest analysis for CMS Energy

CMS Energy Insider Transactions Over The Last Year

Notably, that recent sale by John Russell is the biggest insider sale of CMS Energy shares that we've seen in the last year. That means that even when the share price was slightly below the current price of US$66.61, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 17% of John Russell's stake.

Insiders in CMS Energy didn't buy any shares in the last year. 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!

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Insider Ownership Of CMS Energy

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. CMS Energy insiders own about US$104m worth of shares (which is 0.5% 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 CMS Energy Insider Transactions Indicate?

Insiders haven't bought CMS Energy stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. But since CMS Energy is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing CMS Energy. Every company has risks, and we've spotted 5 warning signs for CMS Energy (of which 1 is a bit concerning!) you should know about.

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.