Insiders Re-Evaluate Their US$834.7k Stock Purchase As Neo Performance Materials Falls To CA$287m

The recent 12% drop in Neo Performance Materials Inc.'s (TSE:NEO) stock could come as a blow to insiders who purchased US$834.7k worth of stock at an average buy price of US$8.05 over the past 12 months. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth US$635.0k, which is not what they expected.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Neo Performance Materials

The Last 12 Months Of Insider Transactions At Neo Performance Materials

In the last twelve months, the biggest single purchase by an insider was when Independent Director Yadin Rozov bought CA$263k worth of shares at a price of CA$8.66 per share. That means that even when the share price was higher than CA$6.12 (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. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

While Neo Performance Materials insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insiders At Neo Performance Materials Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at Neo Performance Materials. Specifically, Independent Director Yadin Rozov bought CA$96k worth of shares in that time, and we didn't record any sales whatsoever. This is a positive in our book as it implies some confidence.

Insider Ownership Of Neo Performance Materials

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. Our data suggests Neo Performance Materials insiders own 1.0% of the company, worth about CA$2.7m. We prefer to see high levels of insider ownership.

So What Do The Neo Performance Materials Insider Transactions Indicate?

The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Neo Performance Materials insiders are expecting a bright future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we found 1 warning sign for Neo Performance Materials that deserve your attention before buying any shares.

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.