CenterPoint Energy Insiders Placed Bullish Bets Worth US$1.41m

Over the last year, a good number of insiders have significantly increased their holdings in CenterPoint Energy, Inc. (NYSE:CNP). This is encouraging because it indicates that insiders are more optimistic about the company's prospects.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for CenterPoint Energy

CenterPoint Energy Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by insider David Lesar for US$1.0m worth of shares, at about US$27.12 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$25.79). It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

Over the last year, we can see that insiders have bought 52.00k shares worth US$1.4m. But they sold 5.67k shares for US$167k. Overall, CenterPoint Energy insiders were net buyers during the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Does CenterPoint Energy Boast High 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that CenterPoint Energy insiders own 0.4% of the company, worth about US$64m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The CenterPoint Energy Insider Transactions Indicate?

It doesn't really mean much that no insider has traded CenterPoint Energy shares in the last quarter. However, our analysis of transactions over the last year is heartening. Insiders own shares in CenterPoint Energy and we see no evidence to suggest they are worried about the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing CenterPoint Energy. Be aware that CenterPoint Energy is showing 3 warning signs in our investment analysis, and 1 of those is a bit concerning...

But note: CenterPoint Energy 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 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.