Multiple insiders secured a larger position in NEXT plc (LON:NXT) shares over the last 12 months. This is reassuring as this suggests that insiders have increased optimism about the company's prospects.
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 NEXT
The CEO & Executive Director Simon Wolfson made the biggest insider purchase in the last 12 months. That single transaction was for UK£10m worth of shares at a price of UK£60.95 each. So it's clear an insider wanted to buy, at around the current price, which is UK£66.94. 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 NEXT insiders decided to buy shares at close to current prices.
Happily, we note that in the last year insiders paid UK£11m for 174.56k shares. But they sold 6.10k shares for UK£397k. In total, NEXT insiders bought more than they sold over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
NEXT Insiders Are Selling The Stock
Over the last three months, we've seen significant insider selling at NEXT. In total, Group Merchandise & Operations Director and Executive Director Richard S Papp dumped UK£397k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.
Does NEXT Boast High 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. It's great to see that NEXT insiders own 1.3% of the company, worth about UK£109m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About NEXT Insiders?
An insider sold NEXT shares recently, but they didn't buy any. In contrast, they appear keener if you look at the last twelve months. On top of that, insiders own a significant portion of the company. So the recent selling doesn't worry us. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. You'd be interested to know, that we found 3 warning signs for NEXT and we suggest you have a look.
But note: NEXT may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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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