Insiders Of Mercantile Bank Make A Tidy Sum Selling At US$34.29

Although Mercantile Bank Corporation (NASDAQ:MBWM) shareholders have enjoyed a great week with the stock up 10%, insiders who sold stock over the past year haven't fared as well. The value of their investment would have been higher had they waited to sell their stock.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Mercantile Bank

The Last 12 Months Of Insider Transactions At Mercantile Bank

Over the last year, we can see that the biggest insider sale was by the Independent Chairman, Michael Price, for US$137k worth of shares, at about US$34.33 per share. That means that an insider was selling shares at slightly below the current price (US$40.57). 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. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 6.2% of Michael Price's holding. The only individual insider seller over the last year was Michael Price.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

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Insiders At Mercantile Bank Have Bought Stock Recently

There was some insider buying at Mercantile Bank over the last quarter. Independent Director Nelson Sanchez bought US$20k worth of shares in that time. It's good to see the insider buying, as well as the lack of recent sellers. But the amount invested in the last three months isn't enough for us too put much weight on it, as a single factor.

Does Mercantile Bank Boast High 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. Insiders own 3.1% of Mercantile Bank shares, worth about US$20m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Mercantile Bank Insider Transactions Indicate?

We note a that there has been a bit of insider buying recently (but no selling). Overall the buying isn't worth writing home about. Still, the insider transactions at Mercantile Bank in the last 12 months are not very heartening. But it's good to see that insiders own shares in the company. While it's good to be aware of 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. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Mercantile Bank.

Of course Mercantile Bank may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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