Some Nuance Communications, Inc. (NASDAQ:NUAN) shareholders may be a little concerned to see that the CEO & Director, Mark Benjamin, recently sold a substantial US$27m worth of stock at a price of US$55.03 per share. Probably the most concerning element of the whole transaction is that the disposal amounted to 55% of their entire holding.
The Last 12 Months Of Insider Transactions At Nuance Communications
In fact, the recent sale by Mark Benjamin was the biggest sale of Nuance Communications shares made by an insider individual in the last twelve months, according to our records. So what is clear is that an insider saw fit to sell at around the current price of US$54.90. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).
In the last year Nuance Communications insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insider Ownership of Nuance Communications
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. Nuance Communications insiders own about US$133m worth of shares (which is 0.8% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Nuance Communications Tell Us?
Insiders sold Nuance Communications shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Nuance Communications. While conducting our analysis, we found that Nuance Communications has 2 warning signs and it would be unwise to ignore them.
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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