Even though Sunnova Energy International Inc. (NYSE:NOVA) stock gained 35% last week, insiders who sold US$1.5m worth of stock over the past year are probably better off. Holding on to stock would have meant their investment would be worth less now than it was at the time of sale. Thus selling at an average price of US$8.00, which is higher than the current price, may have been the best decision.

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.

The Last 12 Months Of Insider Transactions At Sunnova Energy International

Over the last year, we can see that the biggest insider purchase was by Independent Director Akbar Mohamed for US$1.1m worth of shares, at about US$6.92 per share. That means that an insider was happy to buy shares at around the current price of US$7.06. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. In this case we're pleased to report that the insider bought shares at close to current prices. The only individual insider to buy over the last year was Akbar Mohamed.

Over the last year we saw more insider selling of Sunnova Energy International shares, than buying. 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!

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Insiders At Sunnova Energy International Have Sold Stock Recently

The last three months saw significant insider selling at Sunnova Energy International. Specifically, Chairman William Berger ditched US$871k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Sunnova Energy International insiders own 1.2% of the company, worth about US$10m. 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 Sunnova Energy International Tell Us?

An insider sold stock recently, but they haven't been buying. And our longer term analysis of insider transactions didn't bring confidence, either. Insiders own shares, but we're still pretty cautious, given the history of sales. 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. When we did our research, we found 6 warning signs for Sunnova Energy International (2 shouldn't be ignored!) that we believe deserve your full attention.

But note: Sunnova Energy International 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.