Trade Alert: The Chairman Of Melcor Developments Ltd. (TSE:MRD), Timothy Melton, Has Just Spent CA$348k Buying 2.5% More Shares

Investors who take an interest in Melcor Developments Ltd. (TSE:MRD) should definitely note that the Chairman, Timothy Melton, recently paid CA$6.95 per share to buy CA$348k worth of the stock. While that's a very decent purchase to our minds, it was proportionally a bit modest, boosting their holding by just 2.5%.

Check out our latest analysis for Melcor Developments

Melcor Developments Insider Transactions Over The Last Year

In fact, the recent purchase by Timothy Melton was the biggest purchase of Melcor Developments shares made by an insider individual in the last twelve months, according to our records. That implies that an insider found the current price of CA$7.24 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for Melcor Developments share holders is that insiders were buying at near the current price.

Happily, we note that in the last year insiders paid CA$1.1m for 161.31k shares. But insiders sold 17.00 shares worth CA$225. In total, Melcor Developments insiders bought more than they sold over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. 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 growing companies that insiders are buying.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 12% of Melcor Developments shares, worth about CA$28m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Melcor Developments Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. Given that insiders also own a fair bit of Melcor Developments we think they are probably pretty confident of a bright future. 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. Be aware that Melcor Developments is showing 5 warning signs in our investment analysis, and 2 of those don't sit too well with us...

But note: Melcor Developments 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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