Many nVent Electric plc (NYSE:NVT) insiders have been dumping shares over the past year, which may be of interest to the company’s shareholders. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying than whether they are selling, as the latter sends an ambiguous message. However, shareholders should take a closer look if multiple insiders sell shares over a period of time.

While we would never suggest that investors should base their decisions solely on the activities of a company’s management, we think it is perfectly logical to keep an eye on the activities of insiders.

Check out our latest analysis for nVent Electric

Insider transactions by nVent Electric in the last year

CEO and Chairwoman Beth Wozniak made the biggest insider sale in the last 12 months. This single transaction was for $5.3 million worth of shares at a price of $64.79 per share. This means that an insider wanted to sell some shares even though the share price was below the current price of $67.45. When an insider sells below the current price, it suggests they thought this lower price was fair. This makes us wonder what they think of the (higher) recent valuation. Please note, however, that sellers may have different reasons for selling, so we don’t know exactly what they think of the share price. It’s worth noting that this sale was 99% of Beth Wozniak’s stake.

Overall, nVent Electric insiders have sold more than they have bought over the past year. Below is a visual representation of insider transactions (by companies and individuals) over the past 12 months. If you click on the chart, you can see all the individual transactions, including share price, individual, and date!

I’ll like nVent Electric better if I see some big insider buying. While we wait, check out this free List of undervalued stocks and small cap stocks with significant recent insider buying.

Insiders at nVent Electric recently sold shares

At nVent Electric, we’ve seen more insider selling than insider buying recently. We note that insiders cashed in on $1.2 million worth of shares. On the other hand, independent director Herbert Parker spent $497,000 buying shares (as mentioned above). The share price has moved a bit recently, but it’s hard to argue that selling is a positive.

Insider Ownership of nVent Electric

I like to look at how many shares insiders own in a company to get an idea of ​​how aligned they are with insiders. Typically, the higher the percentage of insiders owning, the more likely it is that insiders are motivated to build the company for the long term. Insiders own 0.3% of nVent Electric’s shares, which is worth about $37 million. This level of insider ownership is good, but not particularly remarkable. It certainly suggests a reasonable level of alignment.

So what do nVent Electric’s insider transactions mean?

The naked truth for nVent Electric is that there have been more insider selling than insider buying over the past three months. When we look at the longer-term picture, that’s not very reassuring. But since nVent Electric is profitable and growing, that doesn’t worry us too much. Insider ownership of the stock isn’t particularly high, so this analysis makes us cautious about the company. So we would only buy after careful consideration. While it’s helpful to know what insiders are doing in terms of buying or selling, it’s also helpful to know what risks a particular company faces. Every company has risks, and we’ve found 3 warning signs for nVent Electric (1 of which cannot be ignored!) that you should know.

If you would rather try another company – one with potentially better financials – then don’t miss this free List of interesting companies with HIGH return on equity and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulator. Currently, we only consider open market transactions and private disposals of direct holdings, but not derivative transactions or indirect holdings.

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This Simply Wall St article is of a general nature. We comment solely on the basis of historical data and analyst forecasts, using an unbiased methodology. Our articles do not constitute financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. Our goal is to provide you with long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Simply Wall St does not hold any of the stocks mentioned.