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How Much Are Mitcham Industries, Inc. (NASDAQ:MIND) Insiders Spending On Buying Shares?

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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 shareholders might well want to know whether insiders have been buying or selling shares in Mitcham Industries, Inc. (NASDAQ:MIND).

What Is Insider Selling?

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 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. 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'.

Check out our latest analysis for Mitcham Industries

The Last 12 Months Of Insider Transactions At Mitcham Industries

The VP & COO Dennis Morris made the biggest insider purchase in the last 12 months. That single transaction was for US$84k worth of shares at a price of US$1.65 each. Even though the purchase was made at a significantly lower price than the recent price (US$2.40), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Over the last year, we can see that insiders have bought 105.30k shares worth US$202k. But insiders sold 3.00k shares worth US$7.9k. In the last twelve months there was more buying than selling by Mitcham Industries insiders. They paid about US$1.92 on average. These transactions show that insiders have confidence to invest their own money in the stock, albeit at slightly below the recent price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
insider-trading-volume

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).

Insiders at Mitcham Industries Have Bought Stock Recently

It's good to see that Mitcham Industries 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$124k worth of shares. This could be interpreted as suggesting a positive outlook.

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. I reckon it's a good sign if insiders own a significant number of shares in the company. From our data, it seems that Mitcham Industries insiders own 6.3% of the company, worth about US$1.8m. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Do The Mitcham Industries Insider Transactions Indicate?

The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Mitcham Industries stock. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. While conducting our analysis, we found that Mitcham Industries has 2 warning signs and it would be unwise to ignore them.

Of course Mitcham Industries may not be the best stock to buy. So you may wish to see this free collection of high quality 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.

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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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