Investors who take an interest in Nicholas Financial, Inc. (NASDAQ:NICK) should definitely note that the Independent Chairman, Jeffrey Royal, recently paid US$6.56 per share to buy US$115k worth of the stock. That's a very solid buy in our book, and increased their holding by a noteworthy 47%.

Check out our latest analysis for Nicholas Financial

Nicholas Financial Insider Transactions Over The Last Year

In fact, the recent purchase by Jeffrey Royal was the biggest purchase of Nicholas Financial shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to buy, at around the current price, which is US$6.62. 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. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. In this case we're pleased to report that the insider purchases were made at close to current prices.

In the last twelve months Nicholas Financial insiders were buying shares, but not selling. They paid about US$7.93 on average. These transactions suggest that insiders have considered the current price attractive. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insider Ownership Of Nicholas Financial

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. Based on our data, Nicholas Financial insiders have about 2.4% of the stock, worth approximately US$1.2m. But they may have an indirect interest through a corporate structure that we haven't picked up on. We prefer to see high levels of insider ownership.

So What Do The Nicholas Financial Insider Transactions Indicate?

It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Nicholas Financial insiders are expecting a bright future. 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. To that end, you should learn about the 2 warning signs we've spotted with Nicholas Financial (including 1 which is potentially serious).

But note: Nicholas Financial may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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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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.