Stock Analysis

Trade Alert: The Non-Executive Independent Director Of Michael Hill International Limited (ASX:MHJ), Robert Fyfe, Has Just Spent AU$245k Buying 45% More Shares

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ASX:MHJ
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Investors who take an interest in Michael Hill International Limited (ASX:MHJ) should definitely note that the Non-Executive Independent Director, Robert Fyfe, recently paid AU$0.36 per share to buy AU$245k worth of the stock. That's a very decent purchase to our minds and it grew their holding by a solid 45%.

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Michael Hill International Insider Transactions Over The Last Year

Notably, that recent purchase by Robert Fyfe is the biggest insider purchase of Michael Hill International shares that we've seen in the last year. That means that even when the share price was higher than AU$0.36 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

Michael Hill International insiders may have bought shares in the last year, but they didn't sell any. 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!

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ASX:MHJ Insider Trading Volume September 1st 2020

Michael Hill International 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.

Does Michael Hill International 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. Insiders own 7.5% of Michael Hill International shares, worth about AU$11m, according to our data. However, it's possible that insiders might have an indirect interest through a more complex structure. Whilst better than nothing, we're not overly impressed by these holdings.

So What Do The Michael Hill International Insider Transactions Indicate?

The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. Given that insiders also own a fair bit of Michael Hill International we think they are probably pretty confident of a bright future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we found 3 warning signs for Michael Hill International that deserve your attention before buying any shares.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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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