Multiple insiders secured a larger position in Norfolk Southern Corporation (NYSE:NSC) shares over the last 12 months. This is reassuring as this suggests that insiders have increased optimism about the company's prospects.    

Although we don't think shareholders should simply follow insider transactions,  we do think it is perfectly logical to keep tabs on what insiders are doing.

The Last 12 Months Of Insider Transactions At Norfolk Southern

Notably, that recent purchase by Claude Mongeau is the biggest insider purchase of Norfolk Southern shares that we've seen in the last year.     That implies that an insider found the current price of US$224 per share to be enticing.  Of course they may have changed their mind. But this suggests they are optimistic.  If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value.   Happily, the Norfolk Southern insiders decided to buy shares at close to current prices.    

In the last twelve months insiders purchased 10.73k shares for US$2.4m.  But insiders sold 4.19k shares worth US$958k.     In the last twelve months there was more buying than selling by Norfolk Southern insiders.    You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below.  If you want to know exactly who sold, for how much, and when, simply click on the graph below!

NYSE:NSC Insider Trading Volume June 4th 2024

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Norfolk Southern Insiders Bought Stock Recently  

There has been significantly more insider buying, than selling, at Norfolk Southern, over the last three months.   In fact, four insiders bought US$2.4m worth of shares.    But we did see  Executive VP & Chief Marketing Officer  Claude Elkins sell shares worth US$958k.   We think insiders may be optimistic about the future, since insiders have been net buyers of shares.  

Does Norfolk Southern Boast High 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.   Norfolk Southern insiders own about US$56m worth of shares. That equates to 0.1% 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.  

So What Does This Data Suggest About Norfolk Southern Insiders?

The recent insider purchases are heartening.    And an analysis of the transactions over the last year also gives us confidence.   Given that insiders also own a fair bit of Norfolk Southern we think they are probably pretty confident of a bright future.      So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company.    Case in point: We've spotted 4 warning signs for Norfolk Southern you should be aware of, and 1 of them makes us a bit uncomfortable.  

But note: Norfolk Southern 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.