Trade Alert: The Founder Of Medicenna Therapeutics Corp. (TSE:MDNA), Fahar Merchant, Has Just Spent CA$106k Buying A Few More Shares

By
Simply Wall St
Published
November 11, 2021
TSX:MDNA
Source: Shutterstock

Whilst it may not be a huge deal, we thought it was good to see that the Medicenna Therapeutics Corp. (TSE:MDNA) Founder, Fahar Merchant, recently bought CA$106k worth of stock, for CA$2.68 per share. Nevertheless, it only increased their shareholding by a minuscule percentage, and it wasn't a massive purchase by absolute value, either.

View our latest analysis for Medicenna Therapeutics

Medicenna Therapeutics Insider Transactions Over The Last Year

In fact, the recent purchase by Fahar Merchant was the biggest purchase of Medicenna Therapeutics shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$2.56). Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

While Medicenna Therapeutics insiders bought shares during the last year, they didn't sell. The average buy price was around CA$3.13. I'd consider this a positive as it suggests insiders see value at around the current price. 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!

insider-trading-volume
TSX:MDNA Insider Trading Volume November 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 Medicenna Therapeutics 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. It appears that Medicenna Therapeutics insiders own 20% of the company, worth about CA$28m. 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 Medicenna Therapeutics Tell Us?

It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Insiders likely see value in Medicenna Therapeutics shares, given these transactions (along with notable insider ownership of the company). 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. When we did our research, we found 4 warning signs for Medicenna Therapeutics (1 can't be ignored!) that we believe deserve your full attention.

But note: Medicenna Therapeutics may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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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