We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we’ll take a look at whether insiders have been buying or selling shares in NexGen Energy Ltd. (TSE:NXE).
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, such insiders must disclose their trading activities, and not trade on inside information.
We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
NexGen Energy Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when Founder Leigh Curyer sold CA$1.2m worth of shares at a price of CA$2.88 per share. That means that an insider was selling shares at around the current price of CA$2.57. They could have a variety of motivations for selling, but it’s still not particularly encouraging to see. We usually pause to reflect on the potential that a stock has a high valuation, if insiders have been selling at around the current price.
All up, insiders sold more shares in NexGen Energy than they bought, over the last year. They sold for an average price of about CA$2.82. We don’t gain confidence from insider selling below the recent share price. Of course, the sales could be motivated for a multitude of reasons, so we shouldn’t jump to conclusions. You can see the insider transactions (by 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!
NexGen Energy is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at NexGen Energy Have Bought Stock Recently
We saw some NexGen Energy insider buying shares in the last three months. Director Sybil Veenman shelled out CA$50k for shares in that time. We like it when there are only buyers, and no sellers. But the amount invested in the last three months isn’t enough for us too put much weight on it, as a single factor.
Does NexGen Energy Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Insiders own 1.4% of NexGen Energy shares, worth about CA$12m, according to our data. Overall, this level of ownership isn’t that impressive, but it’s certainly better than nothing!
What Might The Insider Transactions At NexGen Energy Tell Us?
We note a that there has been a tad more insider buying than selling, recently. But the net investment is not enough to encourage us much. Still, the insider transactions at NexGen Energy in the last 12 months are not very heartening. But we do like the fact that insiders own a fair chunk of the company. Of course, the future is what matters most. So if you are interested in NexGen Energy, you should check out this free report on analyst forecasts for the company.
But note: NexGen Energy 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.