Read This Before Selling MainStreet Bancshares, Inc. (NASDAQ:MNSB) Shares

It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in MainStreet Bancshares, Inc. (NASDAQ:MNSB).

Do Insider Transactions Matter?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.

Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

View our latest analysis for MainStreet Bancshares

MainStreet Bancshares Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Senior EVP Thomas Chmelik for US$67k worth of shares, at about US$16.48 per share. So it's clear an insider wanted to buy, at around the current price, which is US$19.67. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for MainStreet Bancshares share holders is that insiders were buying at near the current price.

While MainStreet Bancshares insiders bought shares during the last year, they didn't sell. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

MainStreet Bancshares is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Have MainStreet Bancshares Insiders Traded Recently?

Over the last three months, we've seen a bit of insider buying at MainStreet Bancshares. Independent Director Russell Echlov bought US$6.8k worth of shares in that time. It's good to see the insider buying, as well as the lack of recent sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.

Does MainStreet Bancshares Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. It appears that MainStreet Bancshares insiders own 7.6% of the company, worth about US$11m. 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 Does This Data Suggest About MainStreet Bancshares Insiders?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. That said, the purchases were not large. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in MainStreet Bancshares and their transactions don't cause us concern. 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. You'd be interested to know, that we found 1 warning sign for MainStreet Bancshares and we suggest you have a look.

But note: MainStreet Bancshares 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. 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.
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