Possible bearish signals as MDU Resources Group, Inc. (NYSE:MDU) insiders disposed of US$7.7m worth of stock

By
Simply Wall St
Published
March 18, 2022
NYSE:MDU
Source: Shutterstock

In the last year, many MDU Resources Group, Inc. (NYSE:MDU) insiders sold a substantial stake in the company which may have sparked shareholders' attention. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, if numerous insiders are selling, shareholders should investigate more.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for MDU Resources Group

The Last 12 Months Of Insider Transactions At MDU Resources Group

The Independent Director, Thomas Everist, made the biggest insider sale in the last 12 months. That single transaction was for US$2.5m worth of shares at a price of US$33.70 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of US$26.00. So it may not tell us anything about how insiders feel about the current share price.

Insiders in MDU Resources Group 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. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
NYSE:MDU Insider Trading Volume March 18th 2022

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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 MDU Resources Group insiders own 1.0% of the company, worth about US$50m. 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 MDU Resources Group Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. Still, the insider transactions at MDU Resources Group in the last 12 months are not very heartening. The modest level of insider ownership is, at least, some comfort. 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. Be aware that MDU Resources Group is showing 2 warning signs in our investment analysis, and 1 of those makes us a bit uncomfortable...

But note: MDU Resources Group 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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