Yahoo Finance Insider Stock Buying Reaches AU$1.19m On NEXTDC
Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of NEXTDC Limited (ASX:NXT), it sends a favourable message to the company's shareholders.
While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.
View our latest analysis for NEXTDC
NEXTDC Insider Transactions Over The Last Year
The CEO, MD & Executive Director Craig Scroggie made the biggest insider purchase in the last 12 months. That single transaction was for AU$578k worth of shares at a price of AU$10.80 each. We do like to see buying, but this purchase was made at well below the current price of AU$14.47. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
While NEXTDC insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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).
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. NEXTDC insiders own about AU$47m worth of shares. That equates to 0.6% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At NEXTDC Tell Us?
It doesn't really mean much that no insider has traded NEXTDC shares in the last quarter. However, our analysis of transactions over the last year is heartening. Overall we don't see anything to make us think NEXTDC insiders are doubting the company, and they do own shares. 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. When we did our research, we found 3 warning signs for NEXTDC (1 doesn't sit too well with us!) that we believe deserve your full attention.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.
