Need To Know: Mustang Bio, Inc. (NASDAQ:MBIO) Insiders Have Been Buying Shares
We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we’ll take a look at whether insiders have been buying or selling shares in Mustang Bio, Inc. (NASDAQ:MBIO).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
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 Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
Check out our latest analysis for Mustang Bio
Mustang Bio Insider Transactions Over The Last Year
Non-Executive Director Lindsay Rosenwald made the biggest insider purchase in the last 12 months. That single transaction was for US$221k worth of shares at a price of US$4.41 each. So it’s clear an insider wanted to buy, even at a higher price. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. It’s not at all bad to see insiders buy shares at or above current prices.
Over the last year, we can see that insiders have bought 81.50k shares worth US$339k. In total, Mustang Bio insiders bought more than they sold over the last year. The average buy price was around US$4.16. These transactions suggest that insiders have considered the current price of US$2.53 attractive. You can see the insider transactions over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
Mustang Bio is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Mustang Bio Have Bought Stock Recently
It’s good to see that Mustang Bio insiders have made notable investments in the company’s shares. Not only was there no selling that we can see, but they collectively bought US$339k worth of shares. That shows some optimism about the company’s future.
Insider Ownership of Mustang Bio
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Mustang Bio insiders own 2.1% of the company, currently worth about US$1.5m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About Mustang Bio Insiders?
It’s certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives 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 Mustang Bio insiders are expecting a bright future. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Mustang Bio.
But note: Mustang Bio 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 editorial-team@simplywallst.com.
