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We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell NFI Group Inc. (TSE:NFI), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
The Last 12 Months Of Insider Transactions At NFI Group
In the last twelve months, the biggest single sale by an insider was when the Independent Director, John Marinucci, sold CA$388k worth of shares at a price of CA$51.69 per share. While insider selling is a negative, to us, it is more negative if the shares are sold 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 CA$37.66. So it is hard to draw any strong conclusion from it.
Happily, we note that in the last year insiders paid CA$1.3m for 38627 shares. But insiders sold 14650 shares worth CA$641k. In total, NFI Group insiders bought more than they sold over the last year. Their average price was about CA$34.14. These transactions show that insiders have confidence to invest their own money in the stock, albeit at slightly below the recent price. You can see the insider transactions (by 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!
NFI Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
NFI Group Insiders Bought Stock Recently
There has been significantly more insider buying, than selling, at NFI Group, over the last three months. In fact, three insiders bought US$396k worth of shares. But we did see insider selling worth US$115k. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. It appears that NFI Group insiders own 2.4% of the company, worth about CA$56m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At NFI Group Tell Us?
It’s certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. Given that insiders also own a fair bit of NFI Group we think they are probably pretty confident of a bright future. Of course, the future is what matters most. So if you are interested in NFI Group, you should check out this free report on analyst forecasts for the company.
Of course NFI Group 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.
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If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.