Yahoo Finance Noodles' Recent Gains Improve Losses On Insider Purchases Worth US$2.27m
Insiders who bought US$2.27m worth of Noodles & Company (NASDAQ:NDLS) stock in the last year recovered part of their losses as the stock rose by 11% last week. However, total losses seen by insiders are still US$853k since the time of purchase.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
View our latest analysis for Noodles
Noodles Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when insider James Hoak bought US$900k worth of shares at a price of US$4.88 per share. That means that even when the share price was higher than US$1.99 (the recent price), an insider wanted to purchase shares. 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. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
While Noodles insiders bought shares during the last year, they didn't sell. Their average price was about US$3.19. This is nice to see since it implies that insiders might see value around current prices. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.
Noodles Insiders Bought Stock Recently
Over the last three months, we've seen significant insider buying at Noodles. Not only was there no selling that we can see, but they collectively bought US$241k worth of shares. That shows some optimism about the company's future.
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 10% of Noodles shares, worth about US$9.0m, according to our data. Whilst better than nothing, we're not overly impressed by these holdings.
So What Do The Noodles Insider Transactions Indicate?
It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Noodles stock. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Noodles. While conducting our analysis, we found that Noodles has 4 warning signs and it would be unwise to ignore them.
But note: Noodles 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 of direct interests only, but not derivative transactions or indirect interests.
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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.
