How Much Are MoneyMe Limited (ASX:MME) Insiders Spending On Buying Shares?

It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell MoneyMe Limited (ASX:MME), you may well want to know whether insiders have been buying or selling.

What Is Insider Selling?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.

Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. 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'.

See our latest analysis for MoneyMe

MoneyMe Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when MD, CEO Clayton Howes bought AU$63m worth of shares at a price of AU$1.25 per share. That means that an insider was happy to buy shares at around the current price of AU$1.44. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. 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 MoneyMe insiders decided to buy shares at close to current prices.

Happily, we note that in the last year insiders paid AU$155m for 124.34m shares. But they sold 6.22m shares for AU$9.7m. In total, MoneyMe insiders bought more than they sold over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insiders at MoneyMe Have Sold Stock Recently

Over the last three months, we've seen notably more insider selling, than insider buying, at MoneyMe. In that time, insider Steve Bannigan dumped AU$9.7m worth of shares. On the flip side, Non-Executive Director Scott Emery spent AU$51k on purchasing shares. Generally this level of net selling might be considered a bit bearish.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. MoneyMe insiders own 72% of the company, currently worth about AU$183m 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 MoneyMe Insiders?

Unfortunately, there has been more insider selling of MoneyMe stock, than buying, in the last three months. But we take heart from prior transactions. And insider ownership remains quite considerable. So we're not too bothered by recent selling. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. When we did our research, we found 3 warning signs for MoneyMe (1 makes us a bit uncomfortable!) that we believe deserve your full attention.

But note: MoneyMe 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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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. 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.
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