Nutritional Growth Solutions Slides As Insider Purchases Lose Another US$79k

The recent 13% drop in Nutritional Growth Solutions Ltd.'s (ASX:NGS) stock could come as a blow to insiders who purchased US$190.7k worth of stock at an average buy price of US$0.012 over the past 12 months. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth US$111.8k which is not ideal.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Nutritional Growth Solutions

The Last 12 Months Of Insider Transactions At Nutritional Growth Solutions

Over the last year, we can see that the biggest insider purchase was by insider John Tarrant for AU$138k worth of shares, at about AU$0.012 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.007). Their view may have changed since then, but at least it shows they felt optimistic at the time. 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. John Tarrant was the only individual insider to buy shares in the last twelve months.

John Tarrant bought a total of 15.97m shares over the year at an average price of AU$0.012. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

Nutritional Growth Solutions is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Does Nutritional Growth Solutions Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Nutritional Growth Solutions insiders own 29% of the company, worth about AU$504k. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Nutritional Growth Solutions Insiders?

It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Nutritional Growth Solutions insiders are well aligned, and that they may think the share price is too low. 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 7 warning signs for Nutritional Growth Solutions (6 are a bit unpleasant!) that we believe deserve your full attention.

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 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.