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 Matrix Composites & Engineering Ltd (ASX:MCE).
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. 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.’
Matrix Composites & Engineering Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by Maxwell Begley for AU$1.8m worth of shares, at about AU$0.55 per share. While the sale doesn’t make us feel confident, we do note it was conducted at a price well above the current share price, which is AU$0.36. So it may not shed much light on insider confidence at current levels. The only individual insider seller over the last year was Maxwell Begley.
Over the last year, we can see that insiders have bought 160.00k shares worth AU$63k. But they sold 3.20m for AU$1.8m. You can see a visual depiction of insider transactions 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!
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.
Matrix Composites & Engineering Insiders Bought Stock Recently
There was some insider buying at Matrix Composites & Engineering over the last quarter. Independent Non-Executive Chairman Peter Hood bought AU$44k worth of shares in that time. We like it when there are only buyers, and no sellers. But the amount invested in the last three months isn’t enough for us too put much weight on it, as a single factor.
Does Matrix Composites & Engineering Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Matrix Composites & Engineering insiders own 25% of the company, currently worth about AU$9.5m 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 Do The Matrix Composites & Engineering Insider Transactions Indicate?
Insider purchases have outweighed sales, in the last three months. But the net investment is not enough to encourage us much. The insider transactions at Matrix Composites & Engineering are not very heartening. But it’s good to see that insiders own shares in the company. Of course, the future is what matters most. So if you are interested in Matrix Composites & Engineering, you should check out this free report on analyst forecasts for the company.
Of course Matrix Composites & Engineering may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.