Bullish NEXT plc (LON:NXT) insiders filled their treasuries with UK£11m worth of stock over last year

Over the last year, a good number of insiders have significantly increased their holdings in NEXT plc (LON:NXT). This is encouraging because it indicates that insiders are more optimistic about the company's prospects.

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.

See our latest analysis for NEXT

NEXT Insider Transactions Over The Last Year

The CEO & Executive Director Simon Wolfson made the biggest insider purchase in the last 12 months. That single transaction was for UK£10m worth of shares at a price of UK£60.95 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being UK£58.10). 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.

NEXT 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!

NEXT 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.

NEXT Insiders Bought Stock Recently

Over the last quarter, NEXT insiders have spent a meaningful amount on shares. We can see that Independent Non-Executive Chairman Michael Roney paid UK£361k for shares in the company. No-one sold. This is a positive in our book as it implies some confidence.

Insider Ownership

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. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that NEXT insiders own 1.3% of the company, worth about UK£95m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At NEXT Tell Us?

The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. Insiders likely see value in NEXT 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. For example, NEXT has 3 warning signs (and 1 which is concerning) we think you should know about.

But note: NEXT 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.

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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.

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