Shareholders Can't Ignore US$1.6m Of Sales By Next Science Insiders

While Next Science Limited (ASX:NXS) shareholders have had a good week with the stock up 12%, they shouldn't let their guards down. Although prices were relatively low, insiders chose to sell US$1.6m worth of stock in the past 12 months. This could be a sign of impending weakness.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Next Science

Next Science Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Founder & CTO, Matthew Myntti, for AU$1.5m worth of shares, at about AU$0.68 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of AU$0.47. So it is hard to draw any strong conclusion from it. Matthew Myntti was the only individual insider to sell shares in the last twelve months.

Matthew Myntti ditched 2.32m shares over the year. The average price per share was US$0.68. 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!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insiders At Next Science Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at Next Science. insider Alexander Waislitz spent AU$84k on stock, and there wasn't any selling. This makes one think the business has some good points.

Insider Ownership Of Next Science

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 33% of Next Science shares, worth about AU$34m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Next Science Tell Us?

It is good to see the recent insider purchase. But we can't say the same for the transactions over the last 12 months. While recent transactions indicate confidence in Next Science, insiders don't own enough of the company to overcome our cautiousness about the longer term transactions. So they seem pretty well aligned, overall. 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. At Simply Wall St, we've found that Next Science has 5 warning signs (2 make us uncomfortable!) that deserve your attention before going any further with your analysis.

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.