Don't Ignore The Insider Selling In Mader Group

Some Mader Group Limited (ASX:MAD) shareholders may be a little concerned to see that the Non-Executive Director, Craig Burton, recently sold a substantial AU$8.4m worth of stock at a price of AU$8.40 per share. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 2.7%.

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Mader Group Insider Transactions Over The Last Year

In fact, the recent sale by Craig Burton was the biggest sale of Mader Group shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to take some cash off the table, even slightly below the current price of AU$8.40. 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 2.7% of Craig Burton's holding.

Happily, we note that in the last year insiders paid AU$659k for 113.56k shares. But insiders sold 3.08m shares worth AU$22m. In total, Mader Group insiders sold more than they bought over 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!

Check out our latest analysis for Mader Group

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Insider Ownership Of Mader Group

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Mader Group insiders own about AU$1.2b worth of shares (which is 71% 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 Does This Data Suggest About Mader Group Insiders?

The stark truth for Mader Group 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. On the plus side, Mader Group makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. While it's good to be aware of 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. You'd be interested to know, that we found 1 warning sign for Mader Group and we suggest you have a look.

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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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.