Insiders who placed huge bets on Magellan Financial Group Limited (ASX:MFG) earlier this year would be disappointed with the 3.2% drop

Insiders who bought AU$1.2m worth of Magellan Financial Group Limited's (ASX:MFG) stock at an average buy price of AU$43.32 over the last year may be disappointed by the recent 3.2% decrease in the stock. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth AU$579k which is not ideal.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Magellan Financial Group

Magellan Financial Group Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by insider Brett Cairns for AU$623k worth of shares, at about AU$47.95 per share. That means that even when the share price was higher than AU$21.02 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

In the last twelve months Magellan Financial Group insiders were buying shares, but not selling. 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!

Magellan Financial Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insider Ownership of Magellan Financial Group

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Magellan Financial Group insiders own 35% of the company, currently worth about AU$1.4b 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.

So What Does This Data Suggest About Magellan Financial Group Insiders?

It doesn't really mean much that no insider has traded Magellan Financial Group shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Judging from their transactions, and high insider ownership, Magellan Financial Group insiders feel good about the company's future. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For example - Magellan Financial Group has 3 warning signs we think you should be aware of.

Of course Magellan Financial Group may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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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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.