We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So we’ll take a look at whether insiders have been buying or selling shares in MyState Limited (ASX:MYS).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We don’t think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
The Last 12 Months Of Insider Transactions At MyState
Over the last year, we can see that the biggest insider purchase was by Independent Non-Executive Director Andrea Waters for AU$93k worth of shares, at about AU$4.67 per share. That means that even when the share price was higher, an insider wanted to purchase shares. 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 generally consider it a positive if insiders have been buying on market, even above the current price.
In the last twelve months insiders paid AU$325k for 69.98k shares purchased. In the last twelve months there was more buying than selling by MyState insiders. The average buy price was around AU$4.64. This is nice to see since it implies that insiders might see value around current prices (around AU$4.34). You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
MyState Insiders Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at MyState. In total, insiders bought AU$91k worth of shares in that time, and we didn’t record any sales whatsoever. This makes one think the business has some good points.
Does MyState 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. Our data indicates that MyState insiders own about AU$12m worth of shares (which is 3.1% of the company). Whilst better than nothing, we’re not overly impressed by these holdings.
What Might The Insider Transactions At MyState Tell Us?
It’s certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. Insiders likely see value in MyState shares, given these transactions (along with notable insider ownership of the company). Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for MyState.
Of course MyState may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.