Trade Alert: The Independent Non-Executive Director Of McPherson's Limited (ASX:MCP), Geoffrey Pearce, Has Just Spent AU$133k Buying 88% More Shares
Whilst it may not be a huge deal, we thought it was good to see that the McPherson's Limited (ASX:MCP) Independent Non-Executive Director, Geoffrey Pearce, recently bought AU$133k worth of stock, for AU$3.32 per share. Even though that isn't a massive buy, it did increase their holding by 88%, which is arguably a good sign.
View our latest analysis for McPherson's
McPherson's Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the MD, CEO & Executive Director, Laurence McAllister, sold AU$135k worth of shares at a price of AU$2.69 per share. That means that even when the share price was below the current price of AU$3.02, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was 100% of Laurence McAllister's stake.
Over the last year, we can see that insiders have bought 133.50k shares worth AU$306k. But they sold 65.00k shares for AU$170k. In the last twelve months there was more buying than selling by McPherson's insiders. They paid about AU$2.29 on average. We don't deny that it is nice to see insiders buying stock in the company. But we must note that the investments were made at well below today's share price. 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Does McPherson's Boast High 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 5.4% of McPherson's shares, worth about AU$17m. 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 Do The McPherson's Insider Transactions Indicate?
The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. Insiders likely see value in McPherson's shares, given these transactions (along with notable insider ownership of the company). While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Case in point: We've spotted 3 warning signs for McPherson's you should be aware of.
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.
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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