Insider Stock Buyers At Nido Education Recouped Some Losses This Week
Some of the losses seen by insiders who purchased AU$384.5k worth of Nido Education Limited (ASX:NDO) shares over the past year were recovered after the stock increased by 15% over the past week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled AU$128k since the time of purchase.
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.
Nido Education Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Founder Mathew Edwards bought AU$154k worth of shares at a price of AU$0.28 per share. That means that an insider was happy to buy shares at above the current price of AU$0.27. 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. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
While Nido Education insiders bought shares during the last year, they didn't sell. The average buy price was around AU$0.41. This is nice to see since it implies that insiders might see value around current prices. 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!
Check out our latest analysis for Nido Education
There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insiders At Nido Education Have Bought Stock Recently
Over the last quarter, Nido Education insiders have spent a meaningful amount on shares. Founder Mathew Edwards spent AU$154k on stock, and there wasn't any selling. This is a positive in our book as it implies some confidence.
Insider Ownership
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. Nido Education insiders own 49% of the company, currently worth about AU$30m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At Nido Education Tell Us?
It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Nido Education. Looks promising! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - Nido Education has 2 warning signs we think you should be aware of.
Of course Nido Education may not be the best stock to buy. So you may wish to see this free collection of high quality 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.