Shareholders Can't Ignore AU$936k Of Sales By NICO Resources Insiders

Even though NICO Resources Limited (ASX:NC1) stock gained 21% last week, insiders who sold AU$936k worth of stock over the past year are probably better off. Selling at an average price of AU$0.14, which is higher than the current price, may have been the best move for these insiders because their investment would have been worth less now than when they sold.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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The Last 12 Months Of Insider Transactions At NICO Resources

In the last twelve months, the biggest single sale by an insider was when the Non-Executive Director, Roderick Corps, sold AU$668k worth of shares at a price of AU$0.29 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is AU$0.12. So it is hard to draw any strong conclusion from it. Roderick Corps was the only individual insider to sell shares in the last twelve months.

In the last twelve months insiders purchased 3.10m shares for AU$249k. But they sold 6.67m shares for AU$936k. Roderick Corps sold a total of 6.67m shares over the year at an average price of AU$0.14. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Check out our latest analysis for NICO Resources

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Insiders At NICO Resources Have Bought Stock Recently

There was some insider buying at NICO Resources over the last quarter. Non-Executive Director Roderick Corps purchased AU$20k worth of shares in that period. It's great to see that insiders are only buying, not selling. However, in this case the amount invested recently is quite small.

Insider Ownership Of NICO Resources

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that NICO Resources insiders own 31% of the company, worth about AU$4.4m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At NICO Resources Tell Us?

We note a that there has been a bit of insider buying recently (but no selling). Overall the buying isn't worth writing home about. Our analysis of NICO Resources insider transactions leaves us cautious. But it's good to see that insiders own shares in the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing NICO Resources. To help with this, we've discovered 4 warning signs (3 are a bit concerning!) that you ought to be aware of before buying any shares in NICO Resources.

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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.