Insiders Who Purchased AU$1.43m Of NICO Resources Stock May Not Have Expected 15% Tumble

The recent price decline of 15% in NICO Resources Limited's (ASX:NC1) stock may have disappointed insiders who bought AU$1.43m worth of shares at an average price of AU$0.28 in the past 12 months. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth AU$506.6k, which is not what they expected.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for NICO Resources

The Last 12 Months Of Insider Transactions At NICO Resources

The Non-Executive Chairman Peter Cook made the biggest insider purchase in the last 12 months. That single transaction was for AU$1.0m worth of shares at a price of AU$0.40 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.098). 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. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

In the last twelve months insiders purchased 5.17m shares for AU$1.4m. But they sold 597.91k shares for AU$76k. In total, NICO Resources insiders bought more than they sold over the last year. They paid about AU$0.28 on average. This is nice to see since it implies that insiders might see value around current prices. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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).

NICO Resources Insiders Are Selling The Stock

We have seen a bit of insider selling at NICO Resources, over the last three months. Non-Executive Director Roderick Corps sold just AU$62k worth of shares in that time. Neither the lack of buying nor the presence of selling is heartening. But the amount sold isn't enough for us to put any weight on it.

Insider Ownership Of NICO Resources

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that NICO Resources insiders own 30% of the company, worth about AU$3.3m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About NICO Resources Insiders?

An insider sold NICO Resources shares recently, but they didn't buy any. In contrast, they appear keener if you look at the last twelve months. And insiders do own shares. So we're happy enough to look past some selling. 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. Our analysis shows 6 warning signs for NICO Resources (4 are a bit unpleasant!) and we strongly recommend you look at them before investing.

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.