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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 shareholders might well want to know whether insiders have been buying or selling shares in McMillan Shakespeare Limited (ASX:MMS).
Do Insider Transactions Matter?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. 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’.
McMillan Shakespeare Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Independent Non-Executive Director Helen Kurincic bought AU$133k worth of shares at a price of AU$12.11 per share. That means that an insider was happy to buy shares at around the current price of AU$13.06. Of course they may have changed their mind. But this suggests they are optimistic. While we always like to see insider buying, it’s less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. Happily, the McMillan Shakespeare insiders decided to buy shares at close to current prices.
Happily, we note that in the last year insiders bought 22000 shares for a total of AU$266k. McMillan Shakespeare may have bought shares in the last year, but they didn’t sell any. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
McMillan Shakespeare is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
McMillan Shakespeare Insiders Bought Stock Recently
Over the last quarter, McMillan Shakespeare insiders have spent a meaningful amount on shares. In total, insiders bought AU$266k worth of shares in that time, and we didn’t record any sales whatsoever. That shows some optimism about the company’s future.
Insider Ownership of McMillan Shakespeare
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. McMillan Shakespeare insiders own about AU$58m worth of shares. That equates to 5.3% 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 McMillan Shakespeare Insiders?
It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. Given that insiders also own a fair bit of McMillan Shakespeare we think they are probably pretty confident of a bright future. Of course, the future is what matters most. So if you are interested in McMillan Shakespeare, you should check out this free report on analyst forecasts for the company.
Of course McMillan Shakespeare may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.