NICO Resources' Recent Gains Improve Losses On Insider Purchases Worth AU$3.02m

Some of the losses seen by insiders who purchased AU$3.02m worth of NICO Resources Limited (ASX:NC1) shares over the past year were recovered after the stock increased by 33% over the past week. However, total losses seen by insiders are still AU$1.5m since the time of purchase.

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 NICO Resources

The Last 12 Months Of Insider Transactions At NICO Resources

Over the last year, we can see that the biggest insider purchase was by Non-Executive Chairman Peter Cook for AU$1.0m worth of shares, at about AU$0.40 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.22). Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. 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 NICO Resources insiders were buying shares, but not selling. Their average price was about AU$0.44. I'd consider this a positive as it suggests insiders see value at around the current price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. 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. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

NICO Resources Insiders Bought Stock Recently

Over the last three months, we've seen a bit of insider buying at NICO Resources. Non-Executive Chairman Peter Cook purchased AU$34k worth of shares in that period. It's good to see the insider buying, as well as the lack of recent sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.

Does NICO Resources Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. It appears that NICO Resources insiders own 28% of the company, worth about AU$5.8m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About NICO Resources Insiders?

We note a that there has been a bit of insider buying recently (but no selling). That said, the purchases were not large. However, our analysis of transactions over the last year is heartening. Overall we don't see anything to make us think NICO Resources insiders are doubting the company, and they do own shares. While we like knowing 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 5 warning signs for NICO Resources (of which 2 shouldn't be ignored!) you should know about.

Of course NICO Resources may not be the best stock to buy. So you may wish to see this free collection of high quality 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.