It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in NickelX Limited's (ASX:NKL) case, it's fantastic news for shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
View our latest analysis for NickelX
The Last 12 Months Of Insider Transactions At NickelX
The insider Jason Peterson made the biggest insider purchase in the last 12 months. That single transaction was for AU$391k worth of shares at a price of AU$0.16 each. That means that an insider was happy to buy shares at around the current price of AU$0.16. 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. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for NickelX share holders is that insiders were buying at near the current price.
NickelX insiders may have bought shares in the last year, but they didn't sell any. 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that NickelX insiders own 32% of the company, worth about AU$3.5m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At NickelX Tell Us?
The fact that there have been no NickelX insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in NickelX and their transactions don't cause us concern. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing NickelX. Case in point: We've spotted 4 warning signs for NickelX you should be aware of.