Insiders who purchased Nickel Industries Limited (ASX:NIC) shares in the past 12 months are unlikely to be deeply impacted by the stock's 6.1% decline over the past week. Reason being, despite the recent loss, insiders original purchase value of US$4.0m is now worth US$10m.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Nickel Industries

Nickel Industries Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Independent Non-Executive Chairman Robert Neale bought AU$2.1m worth of shares at a price of AU$0.21 per share. We do like to see buying, but this purchase was made at well below the current price of AU$0.84. 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 12.10m shares for AU$4.0m. On the other hand they divested 10.00m shares, for AU$2.1m. In the last twelve months there was more buying than selling by Nickel Industries insiders. They paid about AU$0.33 on average. We don't deny that it is nice to see insiders buying stock in the company. However, we do note that they were buying at significantly lower prices than today's share price. 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!

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.

Insiders At Nickel Industries Have Bought Stock Recently

It's good to see that Nickel Industries insiders have made notable investments in the company's shares. MD & Director Justin Werner spent AU$1.9m on stock, and there wasn't any selling. This is a positive in our book as it implies some confidence.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Nickel Industries insiders own 7.4% of the company, worth about AU$189m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Nickel Industries Tell Us?

It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Nickel Industries. That's what I like to see! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. While conducting our analysis, we found that Nickel Industries has 3 warning signs and it would be unwise to ignore these.

Of course Nickel Industries 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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