Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Neogen Corporation (NASDAQ:NEOG), it sends a favourable message to the company's shareholders.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Neogen Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by President John Adent for US$284k worth of shares, at about US$12.36 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$16.10. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
In the last twelve months insiders purchased 81.00k shares for US$1.1m. On the other hand they divested 4.86k shares, for US$76k. Overall, Neogen insiders were net buyers during the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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 quarter, Neogen insiders have spent a meaningful amount on shares. Independent Director James Tobin spent US$51k on stock, and there wasn't any selling. That shows some optimism about the company's future.
Insider Ownership Of Neogen
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. Insiders own 0.4% of Neogen shares, worth about US$16m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About Neogen Insiders?
It's certainly positive 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. Given that insiders also own a fair bit of Neogen we think they are probably pretty confident of a bright future. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Neogen.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.
