Insiders Buying Nerds on Site Might Wish They Invested More, Stock Gains 25%

Nerds on Site Inc. (CSE:NERD) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 25%, resulting in a CA$916k rise in the company's market capitalisation, translating to a gain of 14% on their initial investment. As a result, their original purchase of CA$106.6k worth of stock is now worth CA$121.5k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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The Last 12 Months Of Insider Transactions At Nerds on Site

The CEO & Director Charles Regan made the biggest insider purchase in the last 12 months. That single transaction was for CA$100k worth of shares at a price of CA$0.045 each. That means that an insider was happy to buy shares at around the current price of CA$0.05. 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. Happily, the Nerds on Site insider decided to buy shares at close to current prices. Charles Regan was the only individual insider to buy shares in the last twelve months.

Charles Regan bought a total of 2.43m shares over the year at an average price of CA$0.044. 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!

View our latest analysis for Nerds on Site

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

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From our data, it seems that Nerds on Site insiders own 9.5% of the company, worth about CA$434k. However, it's possible that insiders might have an indirect interest through a more complex structure. Whilst better than nothing, we're not overly impressed by these holdings.

What Might The Insider Transactions At Nerds on Site Tell Us?

It is good to see the recent insider purchase. 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. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Nerds on Site insiders are reasonably well aligned, and optimistic for the 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 4 warning signs that you should run your eye over to get a better picture of Nerds on Site.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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 of direct interests only, but not derivative transactions or indirect interests.

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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.