Insiders may be rethinking their US$2.5m Nova Leap Health Corp. (CVE:NLH) investment now that the company has lost CA$3.5m in value




  • In Business
  • 2022-09-28 11:52:49Z
  • By Simply Wall St.
 

The recent price decline of 13% in Nova Leap Health Corp.'s (CVE:NLH) stock may have disappointed insiders who bought US$2.5m worth of shares at an average price of US$0.37 in the past 12 months. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth US$1.8m, which is not great.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Nova Leap Health

The Last 12 Months Of Insider Transactions At Nova Leap Health

The insider Norman Fulcher made the biggest insider purchase in the last 12 months. That single transaction was for CA$1.7m worth of shares at a price of CA$0.35 each. That means that an insider was happy to buy shares at above the current price of CA$0.28. It's very possible they regret the purchase, but it's more likely they are bullish about the company. 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.

While Nova Leap Health insiders bought shares during the last year, they didn't sell. 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!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insiders At Nova Leap Health Have Bought Stock Recently

It's good to see that Nova Leap Health insiders have made notable investments in the company's shares. Overall, five insiders shelled out CA$2.1m for shares in the company -- and none sold. This is a positive in our book as it implies some confidence.

Insider Ownership Of Nova Leap Health

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Nova Leap Health insiders own about CA$9.1m worth of shares. That equates to 38% of the company. 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 Nova Leap Health Tell Us?

It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. Insiders likely see value in Nova Leap Health shares, given these transactions (along with notable insider ownership of the company). In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Nova Leap Health. Case in point: We've spotted 4 warning signs for Nova Leap Health you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.

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

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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