Don't Ignore The Fact That This Insider Just Sold Some Shares In Medical Developments International Limited (ASX:MVP)

Some Medical Developments International Limited (ASX:MVP) shareholders may be a little concerned to see that the Non Executive Chairman, David Williams, recently sold a substantial AU$1.0m worth of stock at a price of AU$6.50 per share. However, that sale only accounted for 1.6% of their holding, so arguably it doesn't say much about their conviction.

See our latest analysis for Medical Developments International

The Last 12 Months Of Insider Transactions At Medical Developments International

Over the last year, we can see that the biggest insider purchase was by Non-Executive Director Gordon Naylor for AU$1.0m worth of shares, at about AU$6.50 per share. So it's clear an insider wanted to buy, at around the current price, which is AU$6.68. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. In this case we're pleased to report that the insider purchases were made at close to current prices.

Over the last year, we can see that insiders have bought 161.00k shares worth AU$1.0m. On the other hand they divested 154.00k shares, for AU$1.0m. In total, Medical Developments International insiders bought more than they sold over the last year. 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!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership of Medical Developments International

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 20% of Medical Developments International shares, worth about AU$85m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Medical Developments International Tell Us?

Insider sales and purchases have netted out over the last three months, so it's hard to draw any conclusion from recent trading. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in Medical Developments International and their transactions don't cause us concern. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Medical Developments International. Every company has risks, and we've spotted 4 warning signs for Medical Developments International (of which 1 is significant!) you should know about.

But note: Medical Developments International 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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