Yahoo Finance With stock up 11%, Insiders of NRG Energy, Inc. (NYSE:NRG) must be wishing they had bought more last year
NRG Energy, Inc. (NYSE:NRG) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 11% resulting in a US$1.0b addition to the company’s market value. As a result, the stock they originally bought for US$70k is now worth US$81k.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
View our latest analysis for NRG Energy
NRG Energy Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Executive VP and Head of Competitive Markets & Policy Christopher Moser for US$70k worth of shares, at about US$36.63 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$42.60. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
NRG Energy is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Does NRG Energy Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. NRG Energy insiders own about US$75m worth of shares. That equates to 0.8% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The NRG Energy Insider Transactions Indicate?
There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in NRG Energy and their transactions don't cause us concern. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing NRG Energy. When we did our research, we found 2 warning signs for NRG Energy (1 doesn't sit too well with us!) that we believe deserve your full attention.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.
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