Insiders who purchased MPower Group Limited (ASX:MPR) earlier this year lose an additional AU$96k as the stock sinks to AU$0.018

The recent 14% drop in MPower Group Limited's (ASX:MPR) stock could come as a blow to insiders who purchased AU$230k worth of stock at an average buy price of AU$0.031 over the past 12 months. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only AU$134k.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for MPower Group

MPower Group Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Executive Chairman Peter Wise bought AU$120k worth of shares at a price of AU$0.024 per share. That means that even when the share price was higher than AU$0.018 (the recent price), an insider wanted to purchase shares. 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. 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 MPower Group insiders were buying shares, but not selling. The average buy price was around AU$0.031. These transactions suggest that insiders have considered the current price attractive. 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!

MPower Group is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insiders At MPower Group Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at MPower Group. Executive Chairman Peter Wise spent AU$120k on stock, and there wasn't any selling. This makes one think the business has some good points.

Does MPower 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. A high insider ownership often makes company leadership more mindful of shareholder interests. MPower Group insiders own about AU$2.4m worth of shares (which is 45% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At MPower Group Tell Us?

It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest MPower Group insiders are well aligned, and quite possibly think the share price is too low. Nice! 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, MPower Group has 5 warning signs (and 3 which are a bit unpleasant) we think you should know about.

Of course MPower 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.