Insiders In Neogen Still Down 15% On US$1.34m Investment

Insiders who bought US$1.34m worth of Neogen Corporation (NASDAQ:NEOG) stock in the last year recovered part of their losses as the stock rose by 17% last week. However, total losses seen by insiders are still US$204k since the time of purchase.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

We've discovered 1 warning sign about Neogen. View them for free.

The Last 12 Months Of Insider Transactions At Neogen

In the last twelve months, the biggest single purchase by an insider was when President John Adent bought US$254k worth of shares at a price of US$11.03 per share. That means that an insider was happy to buy shares at above the current price of US$5.93. 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 if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

While Neogen insiders bought shares during the last year, they didn't sell. They paid about US$6.99 on average. 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. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

See our latest analysis for Neogen

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 Neogen Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at Neogen. In total, insiders bought US$672k worth of shares in that time, and we didn't record any sales whatsoever. This makes one think the business has some good points.

Does Neogen 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our data suggests Neogen insiders own 0.3% of the company, worth about US$3.9m. We prefer to see high levels of insider ownership.

What Might The Insider Transactions At Neogen Tell Us?

It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Neogen insiders are expecting a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Neogen. For example - Neogen has 1 warning sign we think you should be aware of.

Of course Neogen 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.