Yahoo Finance How Many Metal Bank Limited (ASX:MBK) Shares Did Insiders Buy, In The Last Year?
We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in Metal Bank Limited (ASX:MBK).
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, rules govern insider transactions, and certain disclosures are required.
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 Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
Check out our latest analysis for Metal Bank
Metal Bank Insider Transactions Over The Last Year
The insider Russell Luxford made the biggest insider purchase in the last 12 months. That single transaction was for AU$1.3m worth of shares at a price of AU$0.015 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.01). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Notably Russell Luxford was also the biggest seller.
In the last twelve months insiders purchased 88.61m shares for AU$1.3m. But they sold 88.21m shares for AU$882k. Overall, Metal Bank insiders were net buyers during the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Metal Bank 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 Metal Bank Have Sold Stock Recently
The last quarter saw substantial insider selling of Metal Bank shares. Specifically, insider Russell Luxford ditched AU$882k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. From our data, it seems that Metal Bank insiders own 8.0% of the company, worth about AU$811k. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
So What Do The Metal Bank Insider Transactions Indicate?
An insider hasn't bought Metal Bank stock in the last three months, but there was some selling. On the other hand, the insider transactions over the last year are encouraging. But we'd like it if insiders owned more stock, overall. So overall it's hard to argue insiders are bullish. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For example, Metal Bank has 4 warning signs (and 2 which make us uncomfortable) we think you should know about.
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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