When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Inotiv, Inc.'s (NASDAQ:NOTV) instance, it's good news for shareholders.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At Inotiv
The Chief Operating Officer John Beattie made the biggest insider purchase in the last 12 months. That single transaction was for US$199k worth of shares at a price of US$22.34 each. That means that even when the share price was higher than US$4.15 (the recent price), an insider wanted to purchase shares. 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. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
In the last twelve months insiders purchased 20.00k shares for US$282k. But insiders sold 3.12k shares worth US$33k. In total, Inotiv insiders bought more than they sold over the last year. They paid about US$14.09 on average. I'd consider this a positive as it suggests insiders see value at around the current price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
Inotiv is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Inotiv Insiders Bought Stock Recently
Over the last quarter, Inotiv insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought US$60k worth of shares. That shows some optimism about the company's future.
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Inotiv insiders own about US$24m worth of shares. That equates to 22% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Does This Data Suggest About Inotiv Insiders?
It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. Insiders likely see value in Inotiv shares, given these transactions (along with notable insider ownership of the company). 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. Our analysis shows 3 warning signs for Inotiv (1 is a bit concerning!) and we strongly recommend you look at these before investing.
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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