When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Noble Helium Limited’s (ASX:NHE) instance, it’s good news for shareholders.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for Noble Helium
The MD, CEO & Director Shaun Scott made the biggest insider purchase in the last 12 months. That single transaction was for AU$255k worth of shares at a price of AU$0.045 each. That means that an insider was happy to buy shares at above the current price of AU$0.034. 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. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Noble Helium insiders may have bought shares in the last year, but they didn’t sell any. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Noble Helium is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Over the last quarter, Noble Helium insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought AU$582k worth of shares. This makes one think the business has some good points.
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 Noble Helium insiders own 27% of the company, worth about AU$5.2m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
It is good to see recent purchasing. And the longer term insider transactions also give 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 Noble Helium we think they are probably pretty confident of a bright future. So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. Our analysis shows 5 warning signs for Noble Helium (1 makes us a bit uncomfortable!) and we strongly recommend you look at them before investing.
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