We often see insiders buying up shares in companies that perform well over the long term. 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 before you buy or sell Milestone Scientific Inc. (NYSEMKT:MLSS), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year’.
Milestone Scientific Insider Transactions Over The Last Year
The Founder, Leonard Osser, made the biggest insider sale in the last 12 months. That single transaction was for US$280k worth of shares at a price of US$2.10 each. While we don’t usually like to see insider selling, it’s more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (US$1.59). So it may not tell us anything about how insiders feel about the current share price. Notably Leonard Osser was also the biggest buyer, having purchased US$37k worth of shares.
Over the last year we saw more insider selling of Milestone Scientific shares, than buying. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like Milestone Scientific better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insiders at Milestone Scientific Have Sold Stock Recently
Over the last three months, we’ve seen notably more insider selling, than insider buying, at Milestone Scientific. In that time, Founder Leonard Osser dumped US$280k worth of shares. Meanwhile Founder Leonard Osser bought US$37k worth , as we said above . Since the selling really does outweigh the buying, we’d say that these transactions may suggest that some insiders feel the company has been fully valued in recent months.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Milestone Scientific insiders own about US$17m worth of shares. That equates to 17% of the company. 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 Does This Data Suggest About Milestone Scientific Insiders?
The stark truth for Milestone Scientific is that there has been more insider selling than insider buying in the last three months. Despite some insider buying, the longer term picture doesn’t make us feel much more positive. Insiders own shares, but we’re still pretty cautious, given the history of sales. We’re in no rush to buy! 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. To assist with this, we’ve discovered 4 warning signs that you should run your eye over to get a better picture of Milestone Scientific.
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.
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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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