Nerdy, Inc.’s (NYSE: NRDY) recent drop in market capitalization of $ 81 million means a loss of $ 11,000 for insiders who bought this year
Insiders who acquired US $ 182,000 from Nerdy, Inc. (NYSE: NRDY) at an average price of US $ 6.08 over the past 12 months may be dismayed by the recent price decline of 8.2%. Insiders buy in the hope that their investments will increase in value over time. However, due to recent losses, their initial investment is now only worth US $ 171,000, which is not huge.
While we never suggest that investors should base their decisions solely on what the directors of a company have done, we consider it foolish to ignore insider trading altogether.
See our latest review for Nerdy
The Last 12 Months of Insider Trading at Nerdy
In fact, the recent purchase by Gregory Mrva was the largest purchase of Nerdy shares by an insider in the past twelve months, according to our records. So it’s clear that an insider wanted to buy, even at a price higher than the current share price (US $ 5.70). While their opinion may have changed since the purchase, it at least suggests that they have confidence in the future of the business. We always take careful note of the price insiders pay when they buy stocks. It is encouraging to see an insider paid above the current price of the shares, as it suggests they have seen value, even at higher levels. Gregory Mrva was the only individual insider to buy shares in the past twelve months.
Below you can see a visual representation of insider trading (by businesses and individuals) over the past 12 months. If you want to know exactly who sold, for how much and when, just click on the graph below!
There are many other companies in which insiders buy shares. You probably do not want to miss it free list of growing companies that insiders are buying.
Does Nerdy Brag About High Insider Ownership?
Another way to test the alignment between a company’s executives 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 have an incentive to build the business for the long term. Nerdy insiders own 21% of the company, with a current value of around US $ 281 million based on the recent share price. I like to see this level of insider ownership because it increases the chances that management is thinking in the best interests of shareholders.
So what do cheesy insider trading indicate?
It’s good to see the recent insider buy. And longer-term insider trading gives us confidence as well. However, we note that the company has not made a profit in the past twelve months, which makes us cautious. Besides the high number of Insider Owners, this analysis suggests that insiders are quite optimistic about Nerdy. One for the watchlist, at least! So these insider trading can help us build a thesis about the stock, but it’s also worth knowing the risks this business faces. During our analysis, we found that Nerdy has 2 warning signs and it would be unwise to ignore them.
Sure Nerdy might not be the best stock to buy. So you might want to see this free collection of high quality companies.
For the purposes of this article, insiders are those persons who report their transactions to the relevant regulatory body. We currently account for open market transactions and private assignments, but not derivative transactions.
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