NextEd Group Insiders AU$3.7m Short Of Breakeven On Stock Purchase

Insiders who bought AU$4.58m worth of NextEd Group Limited (ASX:NXD) stock in the last year recovered part of their losses as the stock rose by 13% last week. However, total losses seen by insiders are still AU$3.7m since the time of purchase.

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.

View our latest analysis for NextEd Group

The Last 12 Months Of Insider Transactions At NextEd Group

The insider Angus Johnson made the biggest insider purchase in the last 12 months. That single transaction was for AU$4.5m worth of shares at a price of AU$1.19 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.14). Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

In the last twelve months NextEd Group insiders were buying shares, but not selling. The average buy price was around AU$0.68. I'd consider this a positive as it suggests insiders see value at around the current price. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

NextEd Group is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data indicates that NextEd Group insiders own about AU$3.9m worth of shares (which is 13% of the company). We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Whilst better than nothing, we're not overly impressed by these holdings.

So What Does This Data Suggest About NextEd Group Insiders?

The fact that there have been no NextEd Group insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. We'd like to see bigger individual holdings. However, we don't see anything to make us think NextEd Group insiders are doubting the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 3 warning signs for NextEd Group (1 can't be ignored!) that we believe deserve your full attention.

But note: NextEd Group 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.