Bullish Methanex Insiders Loaded Up On US$1.69m Of Stock

It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Methanex Corporation's (TSE:MX) case, it's fantastic news for shareholders.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Methanex

The Last 12 Months Of Insider Transactions At Methanex

Over the last year, we can see that the biggest insider purchase was by Senior Vice President of Manufacturing Gustavo Parra for CA$478k worth of shares, at about CA$51.50 per share. That implies that an insider found the current price of CA$53.13 per share to be enticing. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. The good news for Methanex share holders is that insiders were buying at near the current price.

Over the last year, we can see that insiders have bought 33.21k shares worth CA$1.7m. But insiders sold 11.13k shares worth CA$792k. In the last twelve months there was more buying than selling by Methanex insiders. 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!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

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. A high insider ownership often makes company leadership more mindful of shareholder interests. Methanex insiders own about CA$32m worth of shares. That equates to 0.8% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Methanex Tell Us?

It doesn't really mean much that no insider has traded Methanex 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 Methanex insiders are doubting the company, and they do own shares. 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 - Methanex has 2 warning signs we think you should be aware of.

Of course Methanex 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.