The Independent Non-Executive Director of Nuix Limited (ASX:NXL), Susan Thomas, Just Bought 88% More Shares

By
Simply Wall St
Published
February 24, 2022
ASX:NXL
Source: Shutterstock

Whilst it may not be a huge deal, we thought it was good to see that the Nuix Limited (ASX:NXL) Independent Non-Executive Director, Susan Thomas, recently bought AU$100k worth of stock, for AU$1.32 per share. Even though that isn't a massive buy, it did increase their holding by 88%, which is arguably a good sign.

See our latest analysis for Nuix

Nuix Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Rodney Vawdrey bought AU$501k worth of shares at a price of AU$5.01 per share. That means that even when the share price was higher than AU$1.30 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. 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 Nuix insiders were buying shares, but not selling. They paid about AU$2.64 on average. These transactions suggest that insiders have considered the current price attractive. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
ASX:NXL Insider Trading Volume February 24th 2022

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).

Does Nuix Boast High Insider Ownership?

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 3.7% of Nuix shares, worth about AU$15m. 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 Do The Nuix Insider Transactions Indicate?

It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. Given that insiders also own a fair bit of Nuix we think they are probably pretty confident of a bright 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. Our analysis shows 3 warning signs for Nuix (1 is concerning!) and we strongly recommend you look at them before investing.

But note: Nuix may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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, but not derivative transactions.

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