NYSE:NEE).” data-reactid=”28″ type=”text”>We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in NextEra Energy, Inc. (NYSE:NEE).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
study found that ‘insider purchases earn abnormal returns of more than 6% per year’.” data-reactid=”31″ type=”text”>Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year’.
NextEra Energy Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by insider David Porges for US$880k worth of shares, at about US$220 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$282. Because it occurred at a lower valuation, it doesn’t tell us much about whether insiders might find today’s price attractive.
NextEra Energy insiders may have bought shares in the last year, but they didn’t sell any. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
list of companies. (Hint: insiders have been buying them).” data-reactid=”52″ type=”text”>There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insider Ownership of NextEra Energy
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. NextEra Energy insiders own about US$276m worth of shares (which is 0.2% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The NextEra Energy Insider Transactions Indicate?
2 warning signs for NextEra Energy (1 makes us a bit uncomfortable) you should be aware of.” data-reactid=”56″ type=”text”>There haven’t been any insider transactions in the last three months — that doesn’t mean much. However, our analysis of transactions over the last year is heartening. It would be great to see more insider buying, but overall it seems like NextEra Energy insiders are reasonably well aligned (owning significant chunk of the company’s shares) and optimistic for the future. In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing NextEra Energy. For instance, we’ve identified 2 warning signs for NextEra Energy (1 makes us a bit uncomfortable) you should be aware of.
list of interesting companies.” data-reactid=”57″ type=”text”>Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
This article by Simply Wall St is general in nature. 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.