Stock Analysis

Insiders sitting comfortably on a US$2.0m profit after buying Membership Collective Group Inc. (NYSE:MCG) stock worth US$3.1m last year

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Insiders who purchased Membership Collective Group Inc. (NYSE:MCG) shares in the past 12 months are unlikely to be deeply impacted by the stock's 14% decline over the past week. After taking the recent loss into consideration, the US$3.1m worth of stock they bought is now worth US$5.1m, indicating that their investment yielded a positive return.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Membership Collective Group

Membership Collective Group Insider Transactions Over The Last Year

The Independent Director Mark Ein made the biggest insider purchase in the last 12 months. That single transaction was for US$1.8m worth of shares at a price of US$4.09 each. Even though the purchase was made at a significantly lower price than the recent price (US$6.34), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

In the last twelve months insiders purchased 806.96k shares for US$3.1m. But insiders sold 243.44k shares worth US$1.7m. Overall, Membership Collective Group insiders were net buyers during the last year. 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!

NYSE:MCG Insider Trading Volume March 15th 2023

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.

Insiders At Membership Collective Group Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at Membership Collective Group. Specifically, insider Richard Caring bought US$1.1m worth of shares in that time, and we didn't record any sales whatsoever. This could be interpreted as suggesting a positive outlook.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Membership Collective Group insiders own 35% of the company, currently worth about US$430m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Membership Collective Group Tell Us?

The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Membership Collective Group. Looks promising! 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. Case in point: We've spotted 3 warning signs for Membership Collective Group you should be aware of, and 1 of these is a bit concerning.

Of course Membership Collective Group 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, but not derivative transactions.

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Find out whether Membership Collective Group is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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