Insider Buying: The NEXTDC Limited (ASX:NXT) Non-Executive Director Just Bought 52% More Shares

Simply Wall St
·3 min read

Whilst it may not be a huge deal, we thought it was good to see that the NEXTDC Limited (ASX:NXT) Non-Executive Director, Jennifer Lambert, recently bought AU$70k worth of stock, for AU$11.39 per share. While that isn't the hugest buy, it actually boosted their shareholding by 52%, which is good to see.

Check out our latest analysis for NEXTDC

NEXTDC Insider Transactions Over The Last Year

The Independent Non-Executive Director Eileen Doyle made the biggest insider purchase in the last 12 months. That single transaction was for AU$160k worth of shares at a price of AU$11.59 each. That means that an insider was happy to buy shares at above the current price of AU$11.09. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

NEXTDC insiders may have bought shares in the last year, but they didn't sell any. 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!

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NEXTDC 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.

Insider Ownership of NEXTDC

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. It appears that NEXTDC insiders own 0.6% of the company, worth about AU$32m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The NEXTDC Insider Transactions Indicate?

The recent insider purchase is 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. Insiders likely see value in NEXTDC shares, given these transactions (along with notable insider ownership of the company). So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 1 warning sign for NEXTDC you should know about.

But note: NEXTDC 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.

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