Insider Purchases Worth AU$1.28m See Losses As Nagambie Resources Market Value Drops To AU$9.6m

The recent price decline of 12% in Nagambie Resources Limited's (ASX:NAG) stock may have disappointed insiders who bought AU$1.28m worth of shares at an average price of AU$0.03 in the past 12 months. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only AU$469.9k.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Nagambie Resources

The Last 12 Months Of Insider Transactions At Nagambie Resources

The Independent Non-Executive Director Kevin Perrin made the biggest insider purchase in the last 12 months. That single transaction was for AU$1.2m worth of shares at a price of AU$0.03 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.011). It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

While Nagambie Resources 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. By clicking on the graph below, you can see the precise details of each insider transaction!

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

Insider Ownership Of Nagambie Resources

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 23% of Nagambie Resources shares, worth about AU$2.2m. 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 Nagambie Resources Tell Us?

The fact that there have been no Nagambie Resources insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in Nagambie Resources and we see no evidence to suggest they are worried about the future. 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. To that end, you should learn about the 6 warning signs we've spotted with Nagambie Resources (including 5 which make us uncomfortable).

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.