Insiders Who Purchased US$780.2k Of Noodles Stock May Not Have Expected 16% Tumble

Insiders who bought US$780.2k worth of Noodles & Company's (NASDAQ:NDLS) stock at an average buy price of US$2.48 over the last year may be disappointed by the recent 16% decrease in the stock. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth US$458.5k, which is not great.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Noodles

The Last 12 Months Of Insider Transactions At Noodles

The insider James Hoak made the biggest insider purchase in the last 12 months. That single transaction was for US$290k worth of shares at a price of US$2.90 each. That means that an insider was happy to buy shares at above the current price of US$1.46. Their view may have changed since then, but at least it shows they felt optimistic at the time. 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.

Noodles insiders may have bought shares in the last year, but they didn't sell any. They paid about US$2.48 on average. I'd consider this a positive as it suggests insiders see value at around the current price. 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!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Does Noodles Boast High 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. 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 10% of Noodles shares, worth about US$7.6m, according to our data. Whilst better than nothing, we're not overly impressed by these holdings.

So What Does This Data Suggest About Noodles Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. But insiders have shown more of an appetite for the stock, over the last year. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Noodles stock. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Noodles. To help with this, we've discovered 4 warning signs (1 is significant!) that you ought to be aware of before buying any shares in Noodles.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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 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.