MainStreet Bancshares Director of MainStreet Bank Acquires 279% More Stock

Investors who take an interest in MainStreet Bancshares, Inc. (NASDAQ:MNSB) should definitely note that the Director of MainStreet Bank, Ali Manouchehri, recently paid US$20.69 per share to buy US$103k worth of the stock. That certainly has us anticipating the best, especially since they thusly increased their own holding by 279%, potentially signalling some real optimism.

See our latest analysis for MainStreet Bancshares

The Last 12 Months Of Insider Transactions At MainStreet Bancshares

In fact, the recent purchase by Ali Manouchehri was the biggest purchase of MainStreet Bancshares shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$20.46). Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

Happily, we note that in the last year insiders paid US$257k for 14.03k shares. But insiders sold 2.89k shares worth US$53k. Overall, MainStreet Bancshares insiders were net buyers during the last year. Their average price was about US$18.34. It is certainly positive to see that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

MainStreet Bancshares is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with 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. MainStreet Bancshares insiders own about US$15m worth of shares. That equates to 10% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The MainStreet Bancshares Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. Given that insiders also own a fair bit of MainStreet Bancshares we think they are probably pretty confident of a bright future. 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. At Simply Wall St, we found 1 warning sign for MainStreet Bancshares that deserve your attention before buying any shares.

Of course MainStreet Bancshares 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.