Possible Bearish Signals With Mycronic Insiders Disposing Stock

The fact that multiple Mycronic AB (publ) (STO:MYCR) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

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

Check out our latest analysis for Mycronic

The Last 12 Months Of Insider Transactions At Mycronic

Over the last year, we can see that the biggest insider sale was by the Chairman of the Board, Patrik Tigerschiold, for kr44m worth of shares, at about kr331 per share. That means that even when the share price was below the current price of kr401, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. 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 57% of Patrik Tigerschiold's holding.

In the last twelve months insiders purchased 4.97k shares for kr1.1m. But insiders sold 148.72k shares worth kr49m. All up, insiders sold more shares in Mycronic than they bought, 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!

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Insider Ownership Of Mycronic

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. From our data, it seems that Mycronic insiders own 0.2% of the company, worth about kr75m. Whilst better than nothing, we're not overly impressed by these holdings.

So What Do The Mycronic Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Mycronic shares in the last quarter. We don't take much encouragement from the transactions by Mycronic insiders. The modest level of insider ownership is, at least, some comfort. Of course, the future is what matters most. So if you are interested in Mycronic, you should check out this free report on analyst forecasts for the company.

But note: Mycronic 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 of direct interests only, but not derivative transactions or indirect interests.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com