Potential Nuix Pty Ltd (ASX:NXL) shareholders may wish to note that the Group CEO & Executive Director, Rodney Vawdrey, recently bought AU$501k worth of stock, paying AU$5.01 for each share. Although the purchase only increased their holding by 6.3%, it is still a solid purchase in our view.
Nuix Insider Transactions Over The Last Year
In fact, the recent purchase by Rodney Vawdrey was the biggest purchase of Nuix shares made by an insider individual in the last twelve months, according to our records. That means that an insider was happy to buy shares at above the current price of AU$4.99. 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. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. The only individual insider to buy over the last year was Rodney Vawdrey.
You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Nuix 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.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Nuix insiders own about AU$53m worth of shares. That equates to 3.3% of the company. 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 Nuix Insiders?
It is good to see the recent insider purchase. 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. Given that insiders also own a fair bit of Nuix we think they are probably pretty confident of a bright future. So while it’s helpful to know what insiders are doing in terms of buying or selling, it’s also helpful to know the risks that a particular company is facing. Case in point: We’ve spotted 2 warning signs for Nuix you should be aware of, and 1 of them can’t be ignored.
Of course Nuix 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. 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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