We wouldn't blame NXP Semiconductors N.V. (NASDAQ:NXPI) shareholders if they were a little worried about the fact that Kurt Sievers, the President recently netted about US$2.4m selling shares at an average price of US$276. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 4.6%.
The Last 12 Months Of Insider Transactions At NXP Semiconductors
In fact, the recent sale by President Kurt Sievers was not their only sale of NXP Semiconductors shares this year. Earlier in the year, they fetched US$252 per share in a -US$5.5m sale. So it's clear an insider wanted to take some cash off the table, even below the current price of US$283. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 11% of Kurt Sievers's holding.
Over the last year we saw more insider selling of NXP Semiconductors shares, than buying. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company 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. NXP Semiconductors insiders own about US$82m worth of shares. That equates to 0.1% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At NXP Semiconductors Tell Us?
An insider hasn't bought NXP Semiconductors stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn't bring confidence, either. But since NXP Semiconductors is profitable and growing, we're not too worried by this. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! 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. Case in point: We've spotted 2 warning signs for NXP Semiconductors you should be aware of.
But note: NXP Semiconductors 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.