Selling AU$7.6m Of Mindax Stock Rewarded Insiders

While Mindax Limited (ASX:MDX) shareholders have enjoyed a good week with stock up 13%, they need remain vigilant. Although prices were relatively low, insiders chose to sell AU$7.6m 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 would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Mindax

The Last 12 Months Of Insider Transactions At Mindax

In the last twelve months, the biggest single sale by an insider was when the insider, Andrew Tsang, sold AU$7.6m worth of shares at a price of AU$0.038 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of AU$0.043. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was 78% of Andrew Tsang's stake. Andrew Tsang was the only individual insider to sell over the last year.

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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

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. It appears that Mindax insiders own 38% of the company, worth about AU$34m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Mindax Tell Us?

It doesn't really mean much that no insider has traded Mindax shares in the last quarter. Our analysis of Mindax insider transactions leaves us cautious. The modest level of insider ownership is, at least, some comfort. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example, Mindax has 3 warning signs (and 2 which are significant) we think you should know about.

Of course Mindax 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.