Pleasing Signs As A Number Of Insiders Buy Melcor Developments Stock
Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Melcor Developments Ltd. (TSE:MRD), it sends a favourable message to the company's shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
View our latest analysis for Melcor Developments
Melcor Developments Insider Transactions Over The Last Year
The CEO & Executive Chairman Timothy Melton made the biggest insider purchase in the last 12 months. That single transaction was for CA$226k worth of shares at a price of CA$11.30 each. That means that an insider was happy to buy shares at above the current price of CA$11.07. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
In the last twelve months insiders purchased 20.50k shares for CA$231k. On the other hand they divested 16.05k shares, for CA$191k. In the last twelve months there was more buying than selling by Melcor Developments insiders. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Melcor Developments is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders At Melcor Developments Have Bought Stock Recently
Over the last three months, we've seen significantly more insider buying, than insider selling, at Melcor Developments. We can see that CEO & Executive Chairman Timothy Melton paid CA$226k for shares in the company. But we did see insider selling worth CA$17k. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.
Does Melcor Developments Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 13% of Melcor Developments shares, worth about CA$45m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Melcor Developments Insider Transactions Indicate?
It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. Insiders likely see value in Melcor Developments shares, given these transactions (along with notable insider ownership of the company). In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Melcor Developments. Case in point: We've spotted 3 warning signs for Melcor Developments you should be aware of, and 1 of these makes us a bit uncomfortable.
But note: Melcor Developments 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.
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 of direct interests only, but not derivative transactions or indirect interests.
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.
