We wouldn’t blame Napco Security Technologies, Inc. (NASDAQ:NSSC) shareholders if they were a little worried about the fact that Richard Soloway, the Founder recently netted about US$72m selling shares at an average price of US$31.50. That sale reduced their total holding by 38% which is hardly insignificant, but far from the worst we’ve seen.
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The Last 12 Months Of Insider Transactions At Napco Security Technologies
In fact, the recent sale by Richard Soloway was the biggest sale of Napco Security Technologies shares made by an insider individual in the last twelve months, according to our records. So it’s clear an insider wanted to take some cash off the table, even below the current price of US$32.70. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent 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. We note that the biggest single sale was only 38%of Richard Soloway’s holding.
Insiders in Napco Security Technologies 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!
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Does Napco Security Technologies Boast High Insider Ownership?
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It’s great to see that Napco Security Technologies insiders own 12% of the company, worth about US$140m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At Napco Security Technologies Tell Us?
Insiders sold stock recently, but they haven’t been buying. And there weren’t any purchases to give us comfort, over the last year. On the plus side, Napco Security Technologies makes money, and is growing profits. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn’t make us feel confident about the company. So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. When we did our research, we found 2 warning signs for Napco Security Technologies (1 shouldn’t be ignored!) that we believe deserve your full attention.
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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.
