Huntington Ingalls Industries, Inc. (NYSE:HII) insiders sold $6.9 million worth of stock, a potential red flag that needs to be watched
Whereas Huntington Ingalls Industries, Inc. (NYSE:HII) Shareholders had a good week with the stock up 8.4%, they shouldn’t let their guard down. Despite relatively cheap prices, insiders made the decision to sell $6.9 million worth of stock over the past 12 months. This could be a warning indicator of vulnerabilities in the future.
While we would never suggest that investors base their decisions solely on what a company’s directors have done, we think it makes perfect sense to keep tabs on what insiders are doing.
Check out our latest analysis for Huntington Ingalls Industries
Huntington Ingalls Industries insider trading over the past year
In the past twelve months, the largest single insider sale occurred when independent director Philip M. Bilden sold $3.4 million worth of stock at $218 per share. So what is clear is that an insider saw fit to sell around the current price of US$214. Although insider selling is negative, for us it is even more negative if the stock is sold at a lower price. Given that the sale took place roughly at current prices, this makes us a little cautious but is hardly a major concern.
Huntington Ingalls Industries insiders haven’t bought any shares in the past year. You can see a visual representation of insider trading (by companies and individuals) over the past 12 months, below. If you click on the chart, you can see all individual trades including stock price, individual and date!
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Huntington Ingalls Industries insiders sell shares
Over the past three months, we have seen significant insider selling at Huntington Ingalls Industries. Specifically, the company’s vice president, Nicolas Schuck, gave up US$372,000 worth of stock around this time, and we didn’t record any buys. All in all, that makes us a little cautious, but that’s not all.
Examining the total insider holdings in a company can help you know if they are well aligned with common shareholders. High insider participation often makes company management more concerned with the interests of shareholders. It’s great to see that insiders at Huntington Ingalls Industries own 2.1% of the company, worth approximately $178 million. I like to see this level of insider ownership because it increases the chances that management is thinking about the best interests of shareholders.
What could insider trading at Huntington Ingalls Industries tell us?
An insider recently sold shares, but did not buy. Looking at the last twelve months, our data shows no insider buying. Although insiders hold a lot of stock in the company (which is good), our analysis of their transactions does not give us confidence in the company. In addition to knowing the insider trading going on, it pays to identify the risks that Huntington Ingalls Industries faces. For example, Huntington Ingalls Industries has 2 warning signs (and 1 of concern) that we think you should know about.
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For the purposes of this article, insiders are persons who report their transactions to the relevant regulatory body. We currently record open market transactions and private dispositions, but not derivative transactions.
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