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The Executive Chairman & Chief Investment Officer of NGE Capital Limited (ASX:NGE), David Lamm, Just Bought 17% More Shares

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Potential NGE Capital Limited (ASX:NGE) shareholders may wish to note that the Executive Chairman & Chief Investment Officer, David Lamm, recently bought AU$286k worth of stock, paying AU$0.52 for each share. That's a very decent purchase to our minds and it grew their holding by a solid 17%.

View our latest analysis for NGE Capital

NGE Capital Insider Transactions Over The Last Year

In fact, the recent purchase by Executive Chairman & Chief Investment Officer David Lamm was not their only acquisition of NGE Capital shares this year. Earlier in the year, they paid AU$0.64 per share in a AU$1.9m purchase. That means that even when the share price was higher than AU$0.54 (the recent price), an insider wanted to purchase shares. 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. We always take careful note of the price insiders pay when purchasing shares. 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. Notably David Lamm was also the biggest seller.

In the last twelve months insiders purchased 3.84m shares for AU$2.3m. But insiders sold 2.95m shares worth AU$1.9m. In total, NGE Capital insiders bought more than they sold over 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!

insider-trading-volume
insider-trading-volume

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.

Does NGE Capital Boast High Insider Ownership?

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 31% of NGE Capital shares, worth about AU$6.4m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At NGE Capital Tell Us?

The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest NGE Capital insiders are well aligned, and that they may think the share price is too low. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing NGE Capital. To help with this, we've discovered 2 warning signs (1 is potentially serious!) that you ought to be aware of before buying any shares in NGE Capital.

But note: NGE Capital 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.

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. 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.

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

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