Some Powell Industries, Inc. (NASDAQ:POWL) shareholders may be a little concerned to see that insider Thomas Powell recently sold a substantial US$25m worth of stock at a price of US$502 per share. However, that sale only accounted for 2.2% of their holding, so arguably it doesn't say much about their conviction.
Powell Industries Insider Transactions Over The Last Year
Notably, that recent sale by Thomas Powell is the biggest insider sale of Powell Industries shares that we've seen in the last year. That means that even when the share price was below the current price of US$560, an insider wanted to cash in some shares. 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 2.2% of Thomas Powell's holding.
Powell Industries insiders didn't buy any shares over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
View our latest analysis for Powell Industries
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Insider Ownership Of Powell Industries
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. It's great to see that Powell Industries insiders own 22% of the company, worth about US$1.4b. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At Powell Industries Tell Us?
Insiders haven't bought Powell Industries stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. But since Powell Industries is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we found 1 warning sign for Powell Industries that deserve your attention before buying any shares.
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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 of direct interests only, but not derivative transactions or indirect interests.
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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.