It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we’ll take a look at whether insiders have been buying or selling shares in Mastech Digital, Inc. (NYSEMKT:MHH).
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 equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
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Mastech Digital Insider Transactions Over The Last Year
CFO & Corporate Secretary John Cronin made the biggest insider sale in the last 12 months. That single transaction was for US$442k worth of shares at a price of US$8.56 each. Although we don’t gain confidence from insider selling, we note that this large sale was at well above current price of US$6.53. So it may not tell us anything about how insiders feel about the current share price. The only individual insider seller over the last year was John Cronin.
John Cronin sold a total of 64.00k shares over the year at an average price of US$8.93. 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!
I will like Mastech Digital better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Does Mastech Digital Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Mastech Digital insiders own about US$50m worth of shares (which is 70% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The Mastech Digital Insider Transactions Indicate?
The fact that there have been no Mastech Digital insider transactions recently certainly doesn’t bother us. It’s heartening that insiders own plenty of stock, but we’d like to see more insider buying, since the last year of Mastech Digital insider transactions don’t fill us with confidence. I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.