Insiders Of Nick Scali Retain AU$2.7m Of Investment Selling At Higher Prices

While Nick Scali Limited (ASX:NCK) shareholders have enjoyed a good week with stock up 11%, they need remain vigilant. Even though stock prices were relatively low, insiders elected to sell AU$2.7m worth of stock in the last year, which could indicate some expected downturn.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Nick Scali

Nick Scali Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Independent Non-Executive Chairman, John Ingram, sold AU$2.3m worth of shares at a price of AU$14.88 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of AU$18.00. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 44% of John Ingram's holding.

In total, Nick Scali insiders sold more than they bought over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Insider Ownership Of Nick Scali

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From looking at our data, insiders own AU$4.7m worth of Nick Scali stock, about 0.3% of the company. But they may have an indirect interest through a corporate structure that we haven't picked up on. We consider this fairly low insider ownership.

What Might The Insider Transactions At Nick Scali Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. Our analysis of Nick Scali insider transactions leaves us unenthusiastic. And usually insiders own more stock in the company, according to our data. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Nick Scali.

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.