Insiders who bought MotorCycle Holdings Limited (ASX:MTO) last year must be regretting not buying more as market cap hits AU$191m

By
Simply Wall St
Published
August 11, 2021
ASX:MTO
Source: Shutterstock

MotorCycle Holdings Limited (ASX:MTO) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 12% resulting in a AU$20m addition to the company’s market value. In other words, the original AU$603k purchase is now worth AU$832k.

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 MotorCycle Holdings

MotorCycle Holdings Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Co-Founder David Ahmet for AU$238k worth of shares, at about AU$2.38 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$3.09. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

While MotorCycle Holdings insiders bought shares during the last year, they didn't sell. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
ASX:MTO Insider Trading Volume August 12th 2021

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).

Does MotorCycle Holdings Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. MotorCycle Holdings insiders own about AU$69m worth of shares. That equates to 36% of the company. 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 MotorCycle Holdings Tell Us?

It doesn't really mean much that no insider has traded MotorCycle Holdings shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think MotorCycle Holdings insiders are doubting the company, and they do own shares. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For example, MotorCycle Holdings has 4 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

Of course MotorCycle Holdings 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, but not derivative transactions.

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