We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 shareholders might well want to know whether insiders have been buying or selling shares in Mesa Laboratories, Inc. (NASDAQ:MLAB).
What Is Insider Buying?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
We don’t think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
Mesa Laboratories Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by Director Evan Guillemin for US$3.2m worth of shares, at about US$219 per share. That means that an insider was selling shares at around the current price of US$193. They could have a variety of motivations for selling, but it’s still not particularly encouraging to see. We usually pause to reflect on the potential that a stock has a high valuation, if insiders have been selling at around the current price.
Over the last year, we note insiders sold 31.69k shares worth US$6.1m. In total, Mesa Laboratories insiders sold more than they bought over the last year. The sellers received a price of around US$192, on average. It’s not particularly great to see insiders were selling shares around current prices. But we don’t put too much weight on the insider selling, since sellers could have personal reasons. You can see the insider transactions over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
I will like Mesa Laboratories 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 Mesa Laboratories Have Sold Stock Recently
The last quarter saw substantial insider selling of Mesa Laboratories shares. In total, Evan Guillemin dumped US$3.2m worth of shares in that time, and we didn’t record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Does Mesa Laboratories Boast High 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. We usually like to see fairly high levels of insider ownership. Mesa Laboratories insiders own 11% of the company, currently worth about US$79m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About Mesa Laboratories Insiders?
An insider sold Mesa Laboratories shares recently, but they didn’t buy any. And even if we look to the last year, we didn’t see any purchases. Insiders own shares, but we’re still pretty cautious, given the history of sales. We’re in no rush to buy! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Mesa Laboratories.
But note: Mesa Laboratories 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.
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.