Positive Signs As Multiple Insiders Buy Nutritional Growth Solutions Stock

It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Nutritional Growth Solutions Ltd.'s (ASX:NGS) case, it's fantastic news for shareholders.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Nutritional Growth Solutions

The Last 12 Months Of Insider Transactions At Nutritional Growth Solutions

In the last twelve months, the biggest single purchase by an insider was when insider Danny Segman bought AU$300k worth of shares at a price of AU$0.03 per share. We do like to see buying, but this purchase was made at well below the current price of AU$0.045. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

In the last twelve months Nutritional Growth Solutions insiders were buying shares, but not selling. The average buy price was around AU$0.042. These transactions show that insiders have confidence to invest their own money in the stock, albeit at slightly below the recent price. 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. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insiders At Nutritional Growth Solutions Have Bought Stock Recently

Over the last quarter, Nutritional Growth Solutions insiders have spent a meaningful amount on shares. We can see that insider Danny Segman paid AU$300k for shares in the company. No-one sold. This could be interpreted as suggesting a positive outlook.

Does Nutritional Growth Solutions Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 30% of Nutritional Growth Solutions shares, worth about AU$1.5m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Nutritional Growth Solutions Tell Us?

It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. 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. While it's good to be aware of 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. Every company has risks, and we've spotted 6 warning signs for Nutritional Growth Solutions (of which 5 don't sit too well with us!) you should know about.

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.