Stock Analysis

David Ahmet Is The Co-Founder of MotorCycle Holdings Limited (ASX:MTO) And Just Spent AU$238k On Shares

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Investors who take an interest in MotorCycle Holdings Limited (ASX:MTO) should definitely note that the Co-Founder, David Ahmet, recently paid AU$2.38 per share to buy AU$238k worth of the stock. Although the purchase is not a big one, by either a percentage standpoint or absolute value, it can be seen as a good sign.

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MotorCycle Holdings Insider Transactions Over The Last Year

Notably, that recent purchase by Co-Founder David Ahmet was not the only time they bought MotorCycle Holdings shares this year. Earlier in the year, they paid AU$1.20 per share in a AU$7.6m purchase. We do like to see buying, but this purchase was made at well below the current price of AU$2.50. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

Happily, we note that in the last year insiders paid AU$8.5m for 6.86m shares. But insiders sold 6.30m shares worth AU$7.6m. In total, MotorCycle Holdings 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 want to know exactly who sold, for how much, and when, simply click on the graph below!

ASX:MTO Insider Trading Volume March 9th 2021

MotorCycle Holdings 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.

Insider Ownership

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 36% of MotorCycle Holdings shares, worth about AU$54m. 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 MotorCycle Holdings Insiders?

It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. Given that insiders also own a fair bit of MotorCycle Holdings we think they are probably pretty confident of a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing MotorCycle Holdings. To that end, you should learn about the 4 warning signs we've spotted with MotorCycle Holdings (including 1 which makes us a bit uncomfortable).

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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