Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Nicholas Financial, Inc. (NASDAQ:NICK), it sends a favourable message to the company's shareholders.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
View our latest analysis for Nicholas Financial
The Last 12 Months Of Insider Transactions At Nicholas Financial
The Independent Chairman Jeffrey Royal made the biggest insider purchase in the last 12 months. That single transaction was for US$115k worth of shares at a price of US$6.57 each. That implies that an insider found the current price of US$6.68 per share to be enticing. 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 do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. Happily, the Nicholas Financial insiders decided to buy shares at close to current prices.
While Nicholas Financial insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. 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 growing companies that insiders are buying.
Insiders At Nicholas Financial Have Bought Stock Recently
Over the last quarter, Nicholas Financial insiders have spent a meaningful amount on shares. Independent Chairman Jeffrey Royal spent US$132k on stock, and there wasn't any selling. This is a positive in our book as it implies some confidence.
Insider Ownership Of Nicholas Financial
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data suggests Nicholas Financial insiders own 2.7% of the company, worth about US$1.3m. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. I generally like to see higher levels of ownership.
What Might The Insider Transactions At Nicholas Financial Tell Us?
It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Nicholas Financial insiders are expecting a bright future. 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. For example, Nicholas Financial has 2 warning signs (and 1 which is potentially serious) we think you should know about.