Stock Analysis

Trade Alert: The Independent Director Of Natural Alternatives International, Inc. (NASDAQ:NAII), Alan Lane, Has Sold Some Shares Recently

  •  Updated
NasdaqGM:NAII
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We'd be surprised if Natural Alternatives International, Inc. (NASDAQ:NAII) shareholders haven't noticed that the Independent Director, Alan Lane, recently sold US$207k worth of stock at US$15.91 per share. The eyebrow raising move amounted to a reduction of 28% in their holding.

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The Last 12 Months Of Insider Transactions At Natural Alternatives International

In fact, the recent sale by Alan Lane was the biggest sale of Natural Alternatives International shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to take some cash off the table, even below the current price of US$16.74. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 28% of Alan Lane's holding.

Insiders in Natural Alternatives International didn't buy any shares in the last year. 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
NasdaqGM:NAII Insider Trading Volume February 21st 2021

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Insider Ownership of Natural Alternatives International

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Natural Alternatives International insiders own about US$22m worth of shares. That equates to 22% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Natural Alternatives International Insiders?

Insiders sold Natural Alternatives International shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. But since Natural Alternatives International is profitable and growing, we're not too worried by this. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! While we like knowing 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. Be aware that Natural Alternatives International is showing 4 warning signs in our investment analysis, and 1 of those doesn't sit too well with us...

Of course Natural Alternatives International 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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What are the risks and opportunities for Natural Alternatives International?

Natural Alternatives International, Inc. engages in formulating, manufacturing, and marketing nutritional supplements in the United States, Europe, Australia, Asia, Mexico, and Canada.

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Rewards

  • Price-To-Earnings ratio (6.4x) is below the US market (15x)

Risks

  • Does not have a meaningful market cap ($55M)

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Natural Alternatives International

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