How Much Are Magellan Financial Group Limited (ASX:MFG) Insiders Taking Off The Table?

It is not uncommon to see companies perform well in the years after insiders buy shares. 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 shareholders might well want to know whether insiders have been buying or selling shares in Magellan Financial Group Limited (ASX:MFG).

Do Insider Transactions Matter?

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 equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

Check out our latest analysis for Magellan Financial Group

The Last 12 Months Of Insider Transactions At Magellan Financial Group

Over the last year, we can see that the biggest insider sale was by the Non-Executive Director, Paul Lewis, for AU$9.0m worth of shares, at about AU$60.13 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is AU$49.55. So it may not tell us anything about how insiders feel about the current share price.

Magellan Financial Group insiders didn't buy any shares 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 want to know exactly who sold, for how much, and when, simply click on the graph below!

I will like Magellan Financial Group better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insiders at Magellan Financial Group Have Sold Stock Recently

The last quarter saw substantial insider selling of Magellan Financial Group shares. Specifically, Independent Non-Executive Director Robert Fraser ditched AU$6.0m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership of Magellan Financial Group

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Magellan Financial Group insiders own about AU$2.3b worth of shares (which is 25% 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.

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

An insider sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. But since Magellan Financial Group is profitable and growing, we're not too worried by this. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Magellan Financial Group. For example - Magellan Financial Group has 3 warning signs we think you should be aware of.

But note: Magellan 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.

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