Should you worry about the NIB Chief selling $532,000 worth of shares?

NIB Holdings Limited (ASX:NHF) CEO and MD Mark Fitzgibbon has sold shares worth $532,000, should you worry?

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The NIB Holdings Limited (ASX: NHF) CEO and Managing Director Mark Fitzgibbon has sold shares worth $532,000 on the market.

According to a market release, the private health insurer's boss sold 80,000 shares on the market on 21 May 2019 amounting to just over $532,000.

Many investors might worry when a key management figure sells shares, particularly the CEO. That's probably why the NIB share price is down a little more than 1% today.

NIB said that Mr Fitzgibbon sold the shares (which he owned directly) because the money was needed to meet a personal income tax obligation resulting from past awards of remuneration for his role in the form of NIB shares.

Selling $532,000 worth of shares is a lot, but Mr Fitzgibbon still owns a lot more. Even after the sale of 80,000 shares he still owns 1,609,623 shares directly and 690,621 indirectly. That means he still owns over $10.7 million in just his own name.

Mr Fitzgibbon seems to have been quite lucky that the Federal Election was won by the Liberals and Nationals as it meant he could sell at a higher price than the previous week.

The shorter-term outlook for private health insurers does seem better without Labor's private health insurance premium limits. But will households be able to afford the premiums any more easily? I don't think that part is as simple as some seem to think it is.

The private health system works best with young healthy people subsidising the older policyholders who need private health insurance for their operations and care.

Foolish takeaway

NIB is trading at just under 20x FY20's estimated earnings. This isn't bad value, and I like that NIB is diversifying away from Australian private health insurance earnings, but I feel quite cautious about NIB with the CEO choosing the current share price to sell at.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended NIB Holdings Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

Oil industry worker climbing up metal construction and smiling.
Energy Shares

ASX 200 energy shares lead the market as US trade deals fuel optimism

ASX energy shares lifted 3.94% as more US trade deals led to improved market sentiment.

Read more »

A female ASX investor looks through a magnifying glass that enlarges her eye and holds her hand to her face with her mouth open as if looking at something of great interest or surprise.
Broker Notes

Top brokers name 3 ASX shares to buy next week

Brokers gave buy ratings to these ASX shares last week. Why are they bullish?

Read more »

A smiling businessman in the city looks at his phone and punches the air in celebration of good news.
Broker Notes

These ASX 200 shares could rise 50% to 60%

Brokers believe these shares could deliver big returns for investors.

Read more »

A girl is handed an oversized ice cream cone with lots of different flavours.
Best Shares

8 ASX All Ords shares that tripled in value in FY25

Just 8 out of the 500 companies making up the ASX All Ords achieved share price growth of 200% or…

Read more »

Broker written in white with a man drawing a yellow underline.
Broker Notes

Brokers name 3 ASX shares to buy today

Here's why brokers are feeling bullish about these three shares this week.

Read more »

Woman with a scared look has hands on her face.
Broker Notes

Bapcor shares fell more than 30% yesterday. Should investors buy in the dip?

Is this a value opportunity?

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Broker Notes

Broker raises price targets on 2 ASX 200 shares to buy

Ord Minnett has just upped its 12-month share price targets on 2 buy-rated ASX 200 stocks.

Read more »

Man with rocket wings which have flames coming out of them.
Share Gainers

Guess which ASX All Ords stock just rocketed 34% on strong earnings growth

Investors just sent this ASX All Ords stock surging 34%. Here’s what’s happening.

Read more »