Meltwater N.V. (OB:MWTR) up 16%, but insiders are still down 39% after purchasing US$16m of stock last year

Insiders who purchased US$16m worth of Meltwater N.V. (OB:MWTR) shares over the past year recouped some of their losses after price gained 16% last week. The purchase, however, has proven to be a pricey bet, with losses currently totalling US$6.2m.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Meltwater

Meltwater Insider Transactions Over The Last Year

The Independent Non-Executive Director Erik Langaker made the biggest insider purchase in the last 12 months. That single transaction was for kr9.1m worth of shares at a price of kr26.00 each. That means that an insider was happy to buy shares at above the current price of kr12.39. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

Meltwater insiders may have bought shares in the last year, but they didn't sell any. Their average price was about kr20.40. This is nice to see since it implies that insiders might see value around current prices. 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 Of Meltwater

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Meltwater insiders own 30% of the company, worth about kr1.1b. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Meltwater Insiders?

The fact that there have been no Meltwater insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. With high insider ownership and encouraging transactions, it seems like Meltwater insiders think the business has merit. 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. For instance, we've identified 3 warning signs for Meltwater (2 don't sit too well with us) you should be aware of.

But note: Meltwater 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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This article by Simply Wall St 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. Simply Wall St has no position in any stocks mentioned.