It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Mortgage Advice Bureau (Holdings) PLC (LON:MAB1), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Colombia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
Mortgage Advice Bureau (Holdings) Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by Founder Peter Christopher Brodnicki for UK£509k worth of shares, at about UK£6.27 per share. So what is clear is that an insider saw fit to sell at around the current price of UK£5.32. They could have a variety of motivations for selling, but it’s still not particularly encouraging to see. We generally tread carefully if insiders have been selling on market, even if they sold slightly above the current price.
Happily, we note that in the last year insiders paid UK£37k for 6.12k shares. But they sold 122.05k for UK£765k. In total, Mortgage Advice Bureau (Holdings) insiders sold more than they bought over the last year. The average sell price was around UK£6.27. We don’t gain much confidence from insider selling near the recent share price of UK£5.32. But we don’t put too much weight on the insider selling, since sellers could have personal reasons. The chart below shows insider transactions over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Have Mortgage Advice Bureau (Holdings) Insiders Traded Recently?
We saw some Mortgage Advice Bureau (Holdings) insider buying shares in the last three months. Insiders purchased UK£4.7k worth of shares in that period. It’s great to see that insiders are only buying, not selling. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.
Does Mortgage Advice Bureau (Holdings) Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Mortgage Advice Bureau (Holdings) insiders own about UK£105m worth of shares (which is 30% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About Mortgage Advice Bureau (Holdings) Insiders?
Our data shows a little more insider buying than selling in the last three months. But the difference isn’t much. The insider transactions at Mortgage Advice Bureau (Holdings) are not very heartening. But it’s good to see that insiders own shares in the company. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Mortgage Advice Bureau (Holdings).
But note: Mortgage Advice Bureau (Holdings) 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.
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 firstname.lastname@example.org.