Trade Alert: John Dell At MHM Automation Limited (NZSE:MHM), Has Just Spent NZ$411k Buying 16% More Shares

Investors who take an interest in MHM Automation Limited (NZSE:MHM) should definitely note that insider John Dell recently paid NZ$0.87 per share to buy NZ$411k worth of the stock. That's a very decent purchase to our minds and it grew their holding by a solid 16%.

See our latest analysis for MHM Automation

MHM Automation Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Non-Executive Director, Colin Neal, for NZ$1.1m worth of shares, at about NZ$0.70 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of NZ$0.91. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 15% of Colin Neal's holding. The only individual insider seller over the last year was Colin Neal.

Colin Neal ditched 1.80m shares over the year. The average price per share was NZ$0.73. 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!

I will like MHM Automation better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership

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. MHM Automation insiders own 48% of the company, currently worth about NZ$29m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The MHM Automation Insider Transactions Indicate?

It is good to see the recent insider purchase. On the other hand the transaction history, over the last year, isn't so positive. The recent buying by an insider , along with high insider ownership, suggest that MHM Automation insiders are fairly aligned, and optimistic. 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. In terms of investment risks, we've identified 2 warning signs with MHM Automation and understanding these should be part of your investment process.

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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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.