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Over the last year, a good number of insiders have significantly increased their holdings in Nerdy, Inc. (NYSE:NRDY). 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.
See our latest analysis for Nerdy
Nerdy Insider Transactions Over The Last Year
The Founder Charles Cohn made the biggest insider purchase in the last 12 months. That single transaction was for US$9.7m worth of shares at a price of US$0.91 each. Even though the purchase was made at a significantly lower price than the recent price (US$1.85), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
Happily, we note that in the last year insiders paid US$40m for 34.53m shares. But insiders sold 406.95k shares worth US$715k. In total, Nerdy insiders bought more than they sold over the last year. Their average price was about US$1.17. We don't deny that it is nice to see insiders buying stock in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Nerdy is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Insiders At Nerdy Have Bought Stock Recently
At Nerdy,over the last quarter, we have observed quite a lot more insider buying than insider selling. In fact, two insiders bought US$24m worth of shares. But insiders only sold shares worth US$211k. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.
Insider Ownership Of Nerdy
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Insiders own 27% of Nerdy shares, worth about US$90m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Nerdy Tell Us?
It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. Given that insiders also own a fair bit of Nerdy we think they are probably pretty confident of a bright future. While it's good to be aware of 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. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of Nerdy.