Several Insiders Invested In Nicholas Financial Flagging Positive News \
When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Nicholas Financial, Inc.'s (NASDAQ:NICK) instance, it's good 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 would consider it foolish to ignore insider transactions altogether.
See 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. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$4.68). It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. 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 Nicholas Financial insiders bought shares during the last year, they didn't sell. 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!
Nicholas Financial is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders At Nicholas Financial Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at Nicholas Financial. In total, insiders bought US$139k worth of shares in that time, and we didn't record any sales whatsoever. This makes one think the business has some good points.
Insider Ownership Of Nicholas Financial
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. From looking at our data, insiders own US$1.0m worth of Nicholas Financial stock, about 3.0% of the company. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. We prefer to see high levels of insider ownership.
So What Does This Data Suggest About Nicholas Financial Insiders?
The recent insider purchases are heartening. 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. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Nicholas Financial stock. 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. To help with this, we've discovered 2 warning signs (1 can't be ignored!) that you ought to be aware of before buying any shares in Nicholas Financial.
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, but not derivative transactions.
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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.
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