Midatech Pharma plc (LON:MTPH) Insiders Have Been Selling

We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in Midatech Pharma plc (LON:MTPH).

Do Insider Transactions Matter?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, most countries require that the company discloses such transactions to the market.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia 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'.

Check out our latest analysis for Midatech Pharma

The Last 12 Months Of Insider Transactions At Midatech Pharma

In the last twelve months, the biggest single sale by an insider was when the insider, Michael Hennigan, sold UK£1.4m worth of shares at a price of UK£0.80 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of UK£0.36. So it may not shed much light on insider confidence at current levels. Michael Hennigan was the only individual insider to sell over the last year. Notably Michael Hennigan was also the biggest buyer, having purchased UK£63k worth of shares.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

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. From looking at our data, insiders own UK£250k worth of Midatech Pharma stock, about 1.0% of the company. However, it's possible that insiders might have an indirect interest through a more complex structure. I generally like to see higher levels of ownership.

What Might The Insider Transactions At Midatech Pharma Tell Us?

It doesn't really mean much that no insider has traded Midatech Pharma shares in the last quarter. We don't take much encouragement from the transactions by Midatech Pharma insiders. And usually insiders own more stock in the company, according to our data. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To that end, you should learn about the 5 warning signs we've spotted with Midatech Pharma (including 3 which shouldn't be ignored).

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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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