Have MA Financial Group Insiders Been Selling Stock?

Anyone interested in MA Financial Group Limited (ASX:MAF) should probably be aware that the Co-Founder & Group Executive Vice Chairman, Andrew Pridham, recently divested AU$299k worth of shares in the company, at an average price of AU$4.52 each. However, the silver lining is that the sale only reduced their total holding by 0.2%, so we're hesitant to read anything much into it, on its own.

See our latest analysis for MA Financial Group

The Last 12 Months Of Insider Transactions At MA Financial Group

Notably, that recent sale by Co-Founder & Group Executive Vice Chairman Andrew Pridham was not the only time they sold MA Financial Group shares this year. Earlier in the year, they fetched AU$4.37 per share in a -AU$5.5m sale. That means that even when the share price was below the current price of AU$4.86, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 3.2% of Andrew Pridham's holding.

In the last twelve months insiders purchased 197.08k shares for AU$255k. But insiders sold 2.69m shares worth AU$12m. Over the last year we saw more insider selling of MA Financial Group shares, than buying. The average sell price was around AU$4.37. We don't gain confidence from insider selling below the recent share price. Since insiders sell for many reasons, we wouldn't put too much weight on it. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. MA Financial Group insiders own about AU$256m worth of shares (which is 32% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The MA Financial Group Insider Transactions Indicate?

An insider sold stock recently, but they haven't been buying. Zooming out, the longer term picture doesn't give us much comfort. On the plus side, MA Financial Group makes money, and is growing profits. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 4 warning signs for MA Financial Group (2 don't sit too well with us!) that we believe deserve your full attention.

But note: MA Financial Group may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.