More Money In The Bank For Murray Cod Australia Insiders Who Divested AU$2.7m

While it’s been a great week for Murray Cod Australia Limited (ASX:MCA) shareholders after stock gained 18%, they should consider it with a grain of salt. Although prices were relatively low, insiders chose to sell AU$2.7m worth of stock in the past 12 months. This could be a sign of impending weakness.

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.

Check out our latest analysis for Murray Cod Australia

The Last 12 Months Of Insider Transactions At Murray Cod Australia

Over the last year, we can see that the biggest insider sale was by the Director of Production & Development and Executive Director, Matthew Ryan, for AU$2.7m worth of shares, at about AU$0.07 per share. That means that even when the share price was below the current price of AU$0.13, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 34% of Matthew Ryan's holding. Matthew Ryan was the only individual insider to sell shares in the last twelve months.

In the last twelve months insiders purchased 28.21m shares for AU$2.0m. But they sold 38.30m shares for AU$2.7m. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like Murray Cod Australia better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insiders At Murray Cod Australia Have Bought Stock Recently

Over the last three months, we've seen a bit of insider buying at Murray Cod Australia. Independent Non-Executive Chairman Brett Paton purchased AU$40k worth of shares in that period. We like it when there are only buyers, and no sellers. However, in this case the amount invested recently is quite small.

Insider Ownership Of Murray Cod Australia

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Insiders own 22% of Murray Cod Australia shares, worth about AU$31m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Murray Cod Australia Insiders?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. Overall the buying isn't worth writing home about. Still, the insider transactions at Murray Cod Australia in the last 12 months are not very heartening. But it's good to see that insiders own shares in the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 3 warning signs for Murray Cod Australia (1 is significant!) and we strongly recommend you look at them before investing.

Of course Murray Cod Australia 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 of direct interests only, but not derivative transactions or indirect interests.

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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.