A US$2.1m Market Cap Boost Pleasing ToSinging Machine Company Insiders

The Singing Machine Company, Inc. (NASDAQ:MICS) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 46%, resulting in a US$2.1m rise in the company's market capitalisation, translating to a gain of 12% on their initial investment. As a result, their original purchase of US$1.0m worth of stock is now worth US$1.12m.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Singing Machine Company

Singing Machine Company Insider Transactions Over The Last Year

The Independent Director Jay Foreman made the biggest insider purchase in the last 12 months. That single transaction was for US$1m worth of shares at a price of US$0.91 each. We do like to see buying, but this purchase was made at well below the current price of US$1.02. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

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!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insider Ownership Of Singing Machine Company

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Singing Machine Company insiders own 18% of the company, worth about US$865k. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Singing Machine Company Tell Us?

It doesn't really mean much that no insider has traded Singing Machine Company shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Singing Machine Company and their transactions don't cause us concern. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To that end, you should learn about the 3 warning signs we've spotted with Singing Machine Company (including 2 which can't be ignored).

Of course Singing Machine Company 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.