Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Neogen Corporation (NASDAQ:NEOG), that sends out a positive message to the company's shareholders.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Neogen Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when President John Adent bought US$284k worth of shares at a price of US$12.36 per share. That means that even when the share price was higher than US$11.64 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. 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.

Neogen 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. By clicking on the graph below, you can see the precise details of each insider transaction!

Neogen is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Neogen Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at Neogen. We can see that President John Adent paid US$200k for shares in the company. No-one sold. 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 0.2% of Neogen shares, worth about US$6.2m, according to our data. We do generally prefer see higher levels of insider ownership.

What Might The Insider Transactions At Neogen Tell Us?

The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Neogen insiders are expecting a bright future. Of course, the future is what matters most. So if you are interested in Neogen, you should check out this free report on analyst forecasts for the company.

But note: Neogen 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.