Yahoo Finance Did Naturally Splendid Enterprises Ltd. (CVE:NSP) Insiders Buy Up More Shares?
We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Naturally Splendid Enterprises Ltd. (CVE:NSP).
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
See our latest analysis for Naturally Splendid Enterprises
Naturally Splendid Enterprises Insider Transactions Over The Last Year
insider Rauni Malhi made the biggest insider purchase in the last 12 months. That single transaction was for CA$1.2m worth of shares at a price of CA$0.085 each. That means that even when the share price was higher than CA$0.06 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
Over the last year, we can see that insiders have bought 17.61m shares worth CA$1.7m. But they sold 1865000 for CA$239k. In total, Naturally Splendid Enterprises insiders bought more than they sold over the last year. Their average price was about CA$0.096. I'd consider this a positive as it suggests insiders see value at around the current price. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Naturally Splendid Enterprises is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Have Naturally Splendid Enterprises Insiders Traded Recently?
In the last three months company insider Rauni Malhi divested CA$4.3k worth of stock. That is not a lot. Ultimately the overall selling isn't enough to tell us much.
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company 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. It appears that Naturally Splendid Enterprises insiders own 19% of the company, worth about CA$1.6m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At Naturally Splendid Enterprises Tell Us?
We did not see any insider buying in the last three months, but we did see selling. However, the sales are not big enough to concern us at all. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think Naturally Splendid Enterprises insiders are doubting the company, and they do own shares. To put this in context, take a look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.
But note: Naturally Splendid Enterprises 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.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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