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Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of NGE Capital Limited (ASX:NGE), that sends out a positive message to the company's shareholders.
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.
View our latest analysis for NGE Capital
The Last 12 Months Of Insider Transactions At NGE Capital
The Portfolio Manager & Executive Director Adam Saunders made the biggest insider purchase in the last 12 months. That single transaction was for AU$297k worth of shares at a price of AU$1.07 each. That means that an insider was happy to buy shares at above the current price of AU$1.07. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Notably Adam Saunders was also the biggest seller.
In the last twelve months insiders purchased 292.50k shares for AU$314k. But they sold 287.50k shares for AU$308k. Overall, NGE Capital insiders were net buyers during the last year. 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.
Insider Ownership Of NGE Capital
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. It appears that NGE Capital insiders own 30% of the company, worth about AU$11m. 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 NGE Capital Tell Us?
We can't make any useful conclusions about recent trading, since insider buying and selling has been balanced. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in NGE Capital and their transactions don't cause us concern. 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. At Simply Wall St, we found 4 warning signs for NGE Capital that deserve your attention before buying any shares.