It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell MGM Resorts International (NYSE:MGM), you may well want to know whether insiders have been buying or selling.
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, 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 logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'
MGM Resorts International Insider Transactions Over The Last Year
insider Paul Salem made the biggest insider purchase in the last 12 months. That single transaction was for US$20m worth of shares at a price of US$25.40 each. That means that an insider was happy to buy shares at around the current price of US$28.06. That means they have been optimistic about the company in the past, though they may have changed their mind. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. The good news for MGM Resorts International share holders is that insiders were buying at near the current price.
Over the last year, we can see that insiders have bought 814k shares worth US$21m. But insiders sold 124k shares worth US$3.5m. Overall, MGM Resorts International insiders were net buyers last year. 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 always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
MGM Resorts International Insiders Bought Stock Recently
Over the last three months, we've seen significant insider buying at MGM Resorts International. We can see that insider Atif Rafiq paid US$250k for shares in the company. No-one sold. This could be interpreted as suggesting a positive outlook.
Insider Ownership of MGM Resorts International
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. MGM Resorts International insiders own 0.8% of the company, currently worth about US$112m 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.
What Might The Insider Transactions At MGM Resorts International Tell Us?
It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. Once you factor in the high insider ownership, it certainly seems like insiders are positive about MGM Resorts International. Nice! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for MGM Resorts International.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.