Insider Stock Buying Reaches US$2.30m On NextEra Energy

Quite a few insiders have dramatically grown their holdings in NextEra Energy, Inc. (NYSE:NEE) over the past 12 months. An insider's optimism about the company's prospects is a positive sign.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for NextEra Energy

The Last 12 Months Of Insider Transactions At NextEra Energy

The Independent Director Kirk Hachigian made the biggest insider purchase in the last 12 months. That single transaction was for US$1.1m worth of shares at a price of US$55.84 each. Even though the purchase was made at a significantly lower price than the recent price (US$77.41), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Over the last year, we can see that insiders have bought 38.50k shares worth US$2.3m. But they sold 658.00 shares for US$51k. Overall, NextEra Energy insiders were net buyers during 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!

NextEra Energy is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

NextEra Energy Insiders Are Selling The Stock

The last quarter saw substantial insider selling of NextEra Energy shares. In total, Executive VP of Human Resources & Corporate Services Nicole Daggs sold US$51k 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

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that NextEra Energy insiders own 0.2% of the company, worth about US$270m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At NextEra Energy Tell Us?

An insider sold NextEra Energy shares recently, but they didn't buy any. On the other hand, the insider transactions over the last year are encouraging. On top of that, insiders own a significant portion of the company. So the recent selling doesn't worry us. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Our analysis shows 2 warning signs for NextEra Energy (1 is a bit concerning!) and we strongly recommend you look at these before investing.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.