While Norfolk Southern Corporation (NYSE:NSC) shareholders have had a good week with the stock up 5.6%, they shouldn't let their guards down. Even though stock prices were relatively low, insiders elected to sell US$5.4m worth of stock in the last year, which could indicate some expected downturn.
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.
Check out our latest analysis for Norfolk Southern
Norfolk Southern Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Director, James Squires, for US$5.2m worth of shares, at about US$246 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$252. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 18% of James Squires's stake.
Insiders in Norfolk Southern didn't buy any shares in the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insiders At Norfolk Southern Have Sold Stock Recently
Over the last three months, we've seen significant insider selling at Norfolk Southern. In total, Director James Squires sold US$5.2m 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
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Norfolk Southern insiders own about US$68m 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?
An insider hasn't bought Norfolk Southern stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. On the plus side, Norfolk Southern makes money, and is growing profits. While insiders do own shares, they don't own a heap, and they have been selling. We're in no rush to buy! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Norfolk Southern. In terms of investment risks, we've identified 2 warning signs with Norfolk Southern and understanding these should be part of your investment process.
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, but not derivative transactions.
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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.