Over the last year, a good number of insiders have significantly increased their holdings in Nagambie Resources Limited (ASX:NAG). This is encouraging because it indicates that insiders are more optimistic about the company’s prospects.
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.
The Last 12 Months Of Insider Transactions At Nagambie Resources
In the last twelve months, the biggest single purchase by an insider was when Consultant Kevin Perrin bought AU$1.9m worth of shares at a price of AU$0.066 per share. That means that even when the share price was higher than AU$0.039 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
In the last twelve months Nagambie Resources insiders were buying shares, but not selling. They paid about AU$0.05 on average. This is nice to see since it implies that insiders might see value around current prices. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Nagambie Resources is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders At Nagambie Resources Have Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at Nagambie Resources. Overall, five insiders shelled out AU$2.2m for shares in the company — and none sold. This could be interpreted as suggesting a positive outlook.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 25% of Nagambie Resources shares, worth about AU$5.6m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Nagambie Resources Insider Transactions Indicate?
The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn’t make a profit over the last twelve months, which makes us cautious. Insiders likely see value in Nagambie Resources shares, given these transactions (along with notable insider ownership of the company). So while it’s helpful to know what insiders are doing in terms of buying or selling, it’s also helpful to know the risks that a particular company is facing. For example, Nagambie Resources has 6 warning signs (and 3 which are concerning) we think you should know about.
But note: Nagambie Resources may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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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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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