Nordic Semiconductor ASA's (OB:NOD) recent kr7.8b market cap decline means a loss of US$915k for insiders who bought this year

By
Simply Wall St
Published
April 10, 2022
OB:NOD
Source: Shutterstock

Insiders who acquired US$3.7m worth of Nordic Semiconductor ASA's (OB:NOD) stock at an average price of US$236 in the past 12 months may be dismayed by the recent 19% price decline. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only US$2.8m.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Nordic Semiconductor

Nordic Semiconductor Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Independent Chair of the Board of Directors Birger Steen bought kr2.6m worth of shares at a price of kr264 per share. That means that even when the share price was higher than kr178 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

In the last twelve months Nordic Semiconductor insiders were buying shares, but not selling. The average buy price was around kr236. These transactions suggest that insiders have considered the current price attractive. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
OB:NOD Insider Trading Volume April 10th 2022

Nordic Semiconductor is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 1.5% of Nordic Semiconductor shares, worth about kr518m. 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 Does This Data Suggest About Nordic Semiconductor Insiders?

The fact that there have been no Nordic Semiconductor insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. Judging from their transactions, and high insider ownership, Nordic Semiconductor insiders feel good about the company's 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. For example - Nordic Semiconductor has 1 warning sign we think you should be aware of.

Of course Nordic Semiconductor 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. We currently account for open market transactions and private dispositions, but not derivative transactions.

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