It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in MannKind Corporation's (NASDAQ:MNKD) case, it's fantastic news for 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.
MannKind Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Independent Director Jennifer Grancio bought US$300k worth of shares at a price of US$2.71 per share. Even though the purchase was made at a significantly lower price than the recent price (US$3.76), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
In the last twelve months insiders purchased 178.38k shares for US$483k. On the other hand they divested 4.62k shares, for US$18k. Overall, MannKind insiders were net buyers during the last year. The chart below shows insider transactions (by companies and 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).
Insiders At MannKind Have Sold Stock Recently
The last three months saw some MannKind insider selling. Executive Vice President of Endocrine Business Unit Alejandro Galindo divested only US$18k worth of shares in that time. It's not great to see insider selling, nor the lack of recent buyers. But the volume sold is so low that it really doesn't bother us.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. It appears that MannKind insiders own 1.4% of the company, worth about US$14m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About MannKind Insiders?
While there has not been any insider buying in the last three months, there has been selling. But the sales were small, so we're not concerned. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in MannKind and their transactions don't cause us concern. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we've found that MannKind has 2 warning signs (1 is concerning!) that deserve your attention before going any further with your analysis.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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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