Whilst it may not be a huge deal, we thought it was good to see that the Nicholas Financial, Inc. (NASDAQ:NICK) Independent Chairman, Jeffrey Royal, recently bought US$63k worth of stock, for US$6.26 per share. While we're hesitant to get too excited about a purchase of that size, we do note it increased their holding by a solid 18%.
Check out our latest analysis for Nicholas Financial
Nicholas Financial Insider Transactions Over The Last Year
In fact, the recent purchase by Independent Chairman Jeffrey Royal was not their only acquisition of Nicholas Financial shares this year. They previously made an even bigger purchase of US$115k worth of shares at a price of US$6.57 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$6.20). It's very possible they regret the purchase, but it's more likely they are bullish about the company. 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.
In the last twelve months Nicholas Financial insiders were buying shares, but not selling. 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!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insider Ownership Of Nicholas Financial
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Based on our data, Nicholas Financial insiders have about 2.7% of the stock, worth approximately US$1.2m. However, it's possible that insiders might have an indirect interest through a more complex structure. I generally like to see higher levels of ownership.
What Might The Insider Transactions At Nicholas Financial Tell Us?
It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. 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. Every company has risks, and we've spotted 2 warning signs for Nicholas Financial (of which 1 can't be ignored!) you should know about.
Of course Nicholas Financial 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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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.