Nicholas Financial Insiders Are Down US$31k But Regain Some Losses
Insiders who bought US$198.1k worth of Nicholas Financial, Inc. (NASDAQ:NICK) stock in the last year have seen some of their losses recouped as the stock gained 22% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled US$31k since the time of purchase.
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.
View our latest analysis for Nicholas Financial
The Last 12 Months Of Insider Transactions At Nicholas Financial
Over the last year, we can see that the biggest insider purchase was by Independent Chairman Jeffrey Royal for US$115k worth of shares, at about US$6.57 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$5.44). It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. The only individual insider to buy over the last year was Jeffrey Royal.
Jeffrey Royal bought a total of 30.64k shares over the year at an average price of US$6.47. 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
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. From looking at our data, insiders own US$963k worth of Nicholas Financial stock, about 2.9% 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?
It doesn't really mean much that no insider has traded Nicholas Financial shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. The transactions are fine but it'd be more encouraging if Nicholas Financial insiders bought more shares in the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Nicholas Financial. For instance, we've identified 3 warning signs for Nicholas Financial (2 can't be ignored) you should be aware of.
But note: Nicholas Financial 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 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.
