Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Maggie Beer Holdings Limited (ASX:MBH), that sends out a positive message to the company's shareholders.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Maggie Beer Holdings Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Non-Executive Director Maggie Beer bought AU$180k worth of shares at a price of AU$0.45 per share. That means that even when the share price was higher than AU$0.31 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
Happily, we note that in the last year insiders paid AU$578k for 1.35m shares. But insiders sold 150.00k shares worth AU$50k. Overall, Maggie Beer Holdings insiders were net buyers during the last year. 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!
Maggie Beer Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders At Maggie Beer Holdings Have Bought Stock Recently
At Maggie Beer Holdings,over the last quarter, we have observed quite a lot more insider buying than insider selling. In total, two insiders bought AU$160k worth of shares in that time. On the other hand, Independent Non-Executive Chairman of the Board Reginald Weine netted AU$50k by selling. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Maggie Beer Holdings insiders own about AU$36m worth of shares. That equates to 33% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Does This Data Suggest About Maggie Beer Holdings Insiders?
It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest Maggie Beer Holdings insiders are well aligned, and that they may think the share price is too low. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 1 warning sign with Maggie Beer Holdings and understanding it should be part of your investment process.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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