61% Of This Magellan Financial Group Insider's Holdings Were Sold

Insiders were net sellers of Magellan Financial Group Limited's (ASX:MFG ) stock during the past year. That is, insiders sold more stock than they bought.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Magellan Financial Group

The Last 12 Months Of Insider Transactions At Magellan Financial Group

In the last twelve months, the biggest single sale by an insider was when the Independent Deputy Chairman & Lead Independent Director, Hamish McLennan, sold AU$545k worth of shares at a price of AU$8.52 per share. That means that even when the share price was below the current price of AU$9.43, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. 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 61% of Hamish McLennan's holding. Hamish McLennan was the only individual insider to sell shares in the last twelve months.

Over the last year, we can see that insiders have bought 61.60k shares worth AU$430k. On the other hand they divested 63.95k shares, for AU$545k. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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Insiders At Magellan Financial Group Have Bought Stock Recently

Over the last three months, we've seen a bit of insider buying at Magellan Financial Group. Independent Non-Executive Director David Dixon bought AU$31k worth of shares in that time. It's good to see the insider buying, as well as the lack of recent sellers. However, in this case the amount invested recently is quite small.

Does Magellan Financial Group Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Magellan Financial Group insiders own 10% of the company, currently worth about AU$170m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Magellan Financial Group Tell Us?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. That said, the purchases were not large. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Magellan Financial Group insider transactions don't fill us with confidence. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To help with this, we've discovered 3 warning signs (2 are a bit unpleasant!) that you ought to be aware of before buying any shares in Magellan Financial Group.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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 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.