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NWTG

Newton Golf ($NWTG) Insiders Bet $110K After 98% Stock Collapse – Turnaround Signal or Desperate Move?

04/15/2025 23:13

Sentiment

Serial Buy

Summary

  • Executives and directors at Newton Golf Company ($NWTG) have purchased approximately $110,000 worth of company shares over the past week, a notable move considering the stock has declined by more than 98% over the last 12 months.
  • The company's revenue surged 885.71% from 2023 to 2024, yet net losses widened from $4.63 million to $11.75 million during the same period, with liabilities now exceeding assets.
  • While insider buying is generally a positive signal, investors should carefully weigh this against the company's profitability model issues and significant financial risks.

POSITIVE

  • Consecutive insider purchases by an officer and director send a strong signal that management believes the current stock price is undervalued.
  • The company's massive revenue growth of 885.71% from $350,000 in 2023 to $3.44 million in 2024 indicates positive product demand and business expansion.
  • The initial insider purchase was executed above market price, suggesting strong management confidence in the company's value.

NEGATIVE

  • The company's financial condition with liabilities exceeding assets (debt ratio of 1.53) poses a serious threat to long-term viability.
  • Widening net losses despite substantial revenue growth suggests fundamental profitability issues with the business model.
  • The company has a staggering loss per share of $178.33 and has experienced a stock price decline of over 98% in one year.
  • As a small-cap stock with a market capitalization of approximately $10.1 million, the company faces significant liquidity risks.

Expert

The consumer discretionary sector, particularly the golf industry, is highly cyclical and currently facing headwinds from high inflation and declining consumer confidence. Newton Golf's widening losses despite revenue growth should serve as a warning sign to investors, and insider buying alone cannot solve fundamental profitability issues. As a small niche manufacturer, the company needs fundamental improvements in its cost structure to survive among larger competitors.

Previous Closing Price

$1.88

-0.06(3.09%)

Average Insider Trading Data Over the Past Year

$1.85

Purchase Average Price

$0

Sale Average Price

$37K

Purchase Amount

$0

Sale Amount

Transaction related to News

Trading Date

Filing Date

Insider

Title

Type

Avg. Price

Trans. Value

04/22/2025

04/22/2025

Sale

$

In a notable development, insiders at Newton Golf Company Inc. ($NWTG) have been actively purchasing company shares over the past week, despite the stock having plummeted by more than 98% over the last 12 months. Since the beginning of this week, company executives and directors have invested over $110,000 in purchasing substantial blocks of shares, signaling their confidence in the company's future despite the dramatic stock price decline. Newton Golf Company, headquartered in Camarillo, California, is a manufacturer of golf equipment, specializing in putting instruments, golf shafts, and grips. Formerly known as Sacks Parente Golf, the company was founded in 2018 and currently employs approximately 28 people. The company offers online custom fitting programs and sells its products through e-commerce and global retail partners. On the revenue front, the company has shown remarkable growth, with sales surging from $350,000 in 2023 to $3.44 million in 2024 – an impressive growth rate of 885.71%. However, despite this substantial revenue increase, the company's net losses have actually widened from $4.63 million to $11.75 million during the same period. This suggests that the company is either heavily investing in growth or facing fundamental issues with its business model. There are concerning indicators in the financial statements as well. With total assets of $9.77 million against total liabilities of $14.95 million, the debt ratio stands at 1.53, indicating that liabilities exceed assets. The company's earnings per share show a staggering loss of $178.33, while the current market capitalization stands at approximately $10.1 million. Against this challenging backdrop, recent insider buying activity has drawn attention. On April 7, 2025, company officer Gregor Alasdair Campbell purchased 32,500 shares at an average price of $3.02 per share, for a total transaction amount of $98,150. Notably, this purchase was made at a price slightly above the market closing price of $2.82 that day, suggesting the officer was willing to pay a premium to acquire company shares. Following this, company director Brett Widney Hoge executed two consecutive purchases: first acquiring 4,117 shares at $1.85 per share on April 11, then adding another 4,742 shares at the same price on April 14. Hoge's combined purchases totaled $16,389. Interestingly, the second purchase was made at a price below the day's closing market price of $1.89. These insider purchases have occurred amid a severe downtrend in the company's stock price. $NWTG shares traded in the $140-$170 range in mid-2024, before beginning a decline in August 2024. By mid-December, the stock experienced a precipitous drop from the $40s to the $11 range. A temporary recovery to around $27 occurred from late January to mid-February 2025, but the stock subsequently resumed its downward trajectory, currently trading at around $1.89. This dramatic stock decline and insider buying activity have unfolded against the backdrop of broader market uncertainty in the U.S. In early April 2025, the U.S. market experienced increased volatility due to concerns over trade tensions and tariff policies. On April 4, the U.S. dollar fell by 1.7% in a single day – its largest drop since November 2022. On April 9, markets surged with the S&P 500 jumping 9.5% following President Trump's announcement of a temporary tariff suspension. Despite this tumultuous market environment, Newton Golf insiders have chosen to increase their stakes in the company. This suggests they believe the current stock price significantly undervalues the company or that they have a positive long-term outlook for the business. While insider buying is generally interpreted as a positive signal, investors should consider Newton Golf's serious financial challenges. The company's liabilities exceeding assets and continuing expansion of net losses could potentially threaten its viability. The fact that losses have widened despite substantial revenue growth points to possible fundamental issues with the company's profitability model. In summary, the recent insider buying at Newton Golf Company represents a vote of confidence from management at a time when the stock is trading near historic lows. However, investors should not overlook the company's poor financial condition and persistent expansion of losses. Despite the positive signal of insider buying, an investment in this company still carries significant risk due to its underlying financial challenges.

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