We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Monadelphous Group Limited (ASX:MND), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
Monadelphous Group Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Independent Non-Executive Director Christopher Michelmore for AU$138k worth of shares, at about AU$13.75 per share. That means that an insider was happy to buy shares at around the current price. Of course they may have changed their mind. But this suggests they are optimistic. In any event it’s generally a positive if insiders are buying shares at around the current price.
In the last twelve months insiders paid AU$194k for 14.00k shares purchased. In total, Monadelphous Group insiders bought more than they sold over the last year. Their average price was about AU$13.82. It’s great to see insiders putting their own cash into the company’s stock, albeit at below the recent share price (AU$15.32). The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insiders at Monadelphous Group Have Bought Stock Recently
It’s good to see that Monadelphous Group insiders have made notable investments in the company’s shares. In total, insiders bought AU$194k worth of shares in that time, and we didn’t record any sales whatsoever. This could be interpreted as suggesting a positive outlook.
Does Monadelphous Group Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Monadelphous Group insiders own 3.9% of the company, worth about AU$57m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Do The Monadelphous Group Insider Transactions Indicate?
It is good to see recent purchasing. And the longer term insider transactions also give us confidence. Given that insiders also own a fair bit of Monadelphous Group we think they are probably pretty confident of a bright future. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Monadelphous Group.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.