Have Insiders Been Selling Methanex Corporation (TSE:MX) Shares This Year?

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It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we'll take a look at whether insiders have been buying or selling shares in Methanex Corporation (TSE:MX).

What Is Insider Buying?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, rules govern insider transactions, and certain disclosures are required.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'

See our latest analysis for Methanex

Methanex Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when Independent Director Bruce Aitken sold CA$2.1m worth of shares at a price of CA$97.75 per share. That is hardly a positive sign, even though it took place above the latest price (CA$69.72). So it is hard to draw any strong conclusion from it.

Happily, we note that in the last year insiders paid CA$245k for 3.95k shares. On the other hand they divested 84.37k shares, for CA$7.9m. All up, insiders sold more shares in Methanex than they bought, over the last year. The average sell price was around US$93.74. We are not joyful about insider selling. But we note that the selling, on average, was at well above the recently traded price of CA$69.72. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Methanex is not the only stock that insiders are buying. For those who like to find winning investments this freelist of growing companies with recent insider purchasing, could be just the ticket.

Methanex Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at Methanex. In total, insiders bought US$245k worth of shares in that time, and we didn't record any sales whatsoever. This is a positive in our book as it implies some confidence.

Does Methanex Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. 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 0.8% of Methanex shares, worth about CA$46m. 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 Do The Methanex Insider Transactions Indicate?

It is good to see recent purchasing. On the other hand the transaction history, over the last year, isn't so positive. The more recent transactions are a positive, but Methanex insiders haven't shown the sustained enthusiasm that we look for, although they do own a decent number of shares, overall. In short they are likely aligned with shareholders. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this freereport showing analyst forecasts for its future.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this freelist of interesting companies.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.

Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.