We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Nine Entertainment Co. Holdings Limited (ASX:NEC).
Do Insider Transactions Matter?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
See our latest analysis for Nine Entertainment Holdings
The Last 12 Months Of Insider Transactions At Nine Entertainment Holdings
In the last twelve months, the biggest single purchase by an insider was when Independent Non-Executive Director Catherine West bought AU$99k worth of shares at a price of AU$1.66 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$2.27. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn’t tell us much about what they think of current prices.
While Nine Entertainment Holdings 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 want to know exactly who sold, for how much, and when, simply click on the graph below!
Nine Entertainment Holdings 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.
Nine Entertainment Holdings Insiders Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at Nine Entertainment Holdings. Independent Non-Executive Director Catherine West spent AU$99k on stock, and there wasn’t any selling. 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. From our data, it seems that Nine Entertainment Holdings insiders own 0.3% of the company, worth about AU$9.8m. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. We do generally prefer see higher levels of insider ownership.
So What Do The Nine Entertainment Holdings Insider Transactions Indicate?
The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. While the overall levels of insider ownership are below what we’d like to see, the history of transactions imply that Nine Entertainment Holdings insiders are reasonably well aligned, and optimistic for the future. While we like knowing what’s going on with the insider’s ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. At Simply Wall St, we found 1 warning sign for Nine Entertainment Holdings that deserve your attention before buying any shares.
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.
This article by Simply Wall St is general in nature. 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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