Stock Analysis

Insiders at Eversource Energy (NYSE:ES) sold US$2.5m worth of stock, possibly indicating weakness in the future

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NYSE:ES
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Over the past year, many Eversource Energy (NYSE:ES) insiders sold a significant stake in the company which may have piqued investors' interest. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Eversource Energy

Eversource Energy Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Executive Vice President of Human Resources & Information Technology, Christine Carmody, for US$1.0m worth of shares, at about US$90.14 per share. That means that an insider was selling shares at around the current price of US$83.71. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.

Insiders in Eversource Energy didn't buy any shares in 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!

insider-trading-volume
NYSE:ES Insider Trading Volume December 3rd 2022

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

Insider Ownership Of Eversource 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. Eversource Energy insiders own about US$87m 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.

What Might The Insider Transactions At Eversource Energy Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. Our analysis of Eversource Energy insider transactions leaves us cautious. But it's good to see that insiders own shares in the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Eversource Energy. To help with this, we've discovered 2 warning signs (1 is significant!) that you ought to be aware of before buying any shares in Eversource Energy.

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, but not derivative transactions.

What are the risks and opportunities for Eversource Energy?

Eversource Energy, a public utility holding company, engages in the energy delivery business.

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Rewards

  • Trading at 54.2% below our estimate of its fair value

  • Earnings are forecast to grow 7.5% per year

  • Earnings grew by 17.3% over the past year

Risks

  • Debt is not well covered by operating cash flow

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