Read This Before Selling Nicholas Financial, Inc. (NASDAQ:NICK) Shares
It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we’ll take a look at whether insiders have been buying or selling shares in Nicholas Financial, Inc. (NASDAQ:NICK).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
We don’t think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
See our latest analysis for Nicholas Financial
Nicholas Financial Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when President Douglas Marohn bought US$71k worth of shares at a price of US$10.99 per share. So it’s clear an insider wanted to buy, even at a higher price. Their view may have changed since then, but at least it shows they felt optimistic at the time. That purchase may suggest an expectation of positive returns over the long term.
Over the last year, we can see that insiders have bought 24.45k shares worth US$246k. Overall, Nicholas Financial insiders were net buyers last year. The average buy price was around US$10.08. Although they bought at below the recent price of US$10.59 per share, it is good to see that insiders are willing to invest in the company. You can see a visual depiction of insider transactions 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!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership
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. It’s great to see that Nicholas Financial insiders own 3.5% of the company, worth about US$2.9m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At Nicholas Financial Tell Us?
The fact that there have been no Nicholas Financial insider transactions recently certainly doesn’t bother us. But insiders have shown more of an appetite for the stock, over the last year. We’d like to see bigger individual holdings. However, we don’t see anything to make us think Nicholas Financial insiders are doubting the company. I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
Of course Nicholas Financial may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
