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 we’ll take a look at whether insiders have been buying or selling shares in Medical Transcription Billing, Corp. (NASDAQ:MTBC).
What Is Insider Buying?
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, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Colombia 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’.
The Last 12 Months Of Insider Transactions At Medical Transcription Billing
CEO & Director Stephen Snyder made the biggest insider sale in the last 12 months. That single transaction was for US$136k worth of shares at a price of US$5.04 each. While the sale doesn’t make us feel confident, we do note it was conducted at a price well above the current share price, which is US$3.40. So it may not shed much light on insider confidence at current levels.
In total, Medical Transcription Billing insiders sold more than they bought over the last year. They sold for an average price of about US$4.86. Insider selling doesn’t make us excited to buy. But the selling was at much higher prices than the current share price (US$3.40), so it probably doesn’t tell us a lot about the value on offer today. The chart below shows insider transactions over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like Medical Transcription Billing better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insiders at Medical Transcription Billing Have Sold Stock Recently
Over the last three months, we’ve seen significant insider selling at Medical Transcription Billing. Specifically, Stephen Snyder ditched US$136k worth of shares in that time, and we didn’t record any purchases whatsoever. Overall this makes us a bit cautious, but it’s not the be all and end all.
Insider Ownership of Medical Transcription Billing
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it’s a good sign if insiders own a significant number of shares in the company. Medical Transcription Billing insiders own about US$30m worth of shares (which is 72% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At Medical Transcription Billing Tell Us?
An insider sold Medical Transcription Billing shares recently, but they didn’t buy any. Despite some insider buying, the longer term picture doesn’t make us feel much more positive. The company boasts high insider ownership, but we’re a little hesitant, given the history of share sales. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Medical Transcription Billing.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.