Insiders who bought Nickel Industries Limited (ASX:NIC) stock in the last 12 months were richly rewarded last week. The company’s market value increased by AU$178m as a result of the stock’s 5.3% gain over the same period. As a result, the stock they originally bought for US$3.1m is now worth US$3.4m.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for Nickel Industries
Nickel Industries Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Non-Executive Director Weifeng Huang bought AU$895k worth of shares at a price of AU$1.33 per share. That means that even when the share price was higher than AU$1.30 (the recent price), an insider wanted to purchase shares. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Nickel Industries insiders may have bought shares in the last year, but they didn’t sell any. They paid about AU$1.19 on average. These transactions show that insiders have confidence to invest their own money in the stock, albeit at slightly below the recent price. 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!
Nickel Industries is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Nickel Industries Have Bought Stock Recently
Over the last quarter, Nickel Industries insiders have spent a meaningful amount on shares. Non-Executive Director Weifeng Huang spent AU$749k on stock, and there wasn’t any selling. This could be interpreted as suggesting a positive outlook.
Does Nickel Industries Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Nickel Industries insiders own 8.4% of the company, currently worth about AU$297m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Nickel Industries Insider Transactions Indicate?
The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Nickel Industries. One for the watchlist, at least! While we like knowing what’s going on with the insider’s ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. In terms of investment risks, we’ve identified 3 warning signs with Nickel Industries and understanding these should be part of your investment process.
Of course Nickel Industries may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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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