Nine Energy Service Up 16%, Insiders Still Down After US$2.61m Purchase

Some of the losses seen by insiders who purchased US$2.61m worth of Nine Energy Service, Inc. (NYSE:NINE) shares over the past year were recovered after the stock increased by 16% over the past week. The purchase, however, has proven to be a pricey bet, with losses currently totalling US$525k.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Nine Energy Service

The Last 12 Months Of Insider Transactions At Nine Energy Service

In the last twelve months, the biggest single purchase by an insider was when insider William Monroe bought US$1.9m worth of shares at a price of US$1.61 per share. That means that an insider was happy to buy shares at above the current price of US$1.25. 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. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. The only individual insider to buy over the last year was William Monroe.

William Monroe purchased 1.67m shares over the year. The average price per share was US$1.57. The chart below shows insider transactions (by companies and individuals) over the last year. 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).

Insiders At Nine Energy Service Have Bought Stock Recently

There has been significantly more insider buying, than selling, at Nine Energy Service, over the last three months. We can see that insider William Monroe paid US$744k for shares in the company. On the other hand, insiders netted US$136k by selling. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Nine Energy Service insiders own about US$14m worth of shares. That equates to 27% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Nine Energy Service Tell Us?

The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Given that insiders also own a fair bit of Nine Energy Service we think they are probably pretty confident of a bright future. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To help with this, we've discovered 5 warning signs (2 shouldn't be ignored!) that you ought to be aware of before buying any shares in Nine Energy Service.

Of course Nine Energy Service 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 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.