Should You Take Comfort From Insider Transactions At Manhattan Bridge Capital, Inc. (NASDAQ:LOAN)?

By
Simply Wall St
Published
November 03, 2020
NasdaqCM:LOAN

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 Manhattan Bridge Capital, Inc. (NASDAQ:LOAN).

What Is Insider Buying?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, such insiders must disclose their trading activities, and not trade on inside information.

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. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

Check out our latest analysis for Manhattan Bridge Capital

The Last 12 Months Of Insider Transactions At Manhattan Bridge Capital

In the last twelve months, the biggest single purchase by an insider was when Independent Director Lyron Bentovim bought US$135k worth of shares at a price of US$4.19 per share. That implies that an insider found the current price of US$4.27 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. Happily, the Manhattan Bridge Capital insiders decided to buy shares at close to current prices. Notably Lyron Bentovim was also the biggest seller.

Happily, we note that in the last year insiders paid US$304k for 79.29k shares. On the other hand they divested 31.89k shares, for US$134k. In total, Manhattan Bridge Capital insiders bought more than they sold over the last year. 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!

insider-trading-volume
NasdaqCM:LOAN Insider Trading Volume November 3rd 2020

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insiders at Manhattan Bridge Capital Have Bought Stock Recently

Over the last three months, we've seen a bit of insider buying at Manhattan Bridge Capital. In that period insiders spent US$166k on shares. However, Independent Director Lyron Bentovim netted US$134k for sales. It is nice to see that insiders have bought, but the quantum isn't large enough to get us excited.

Does Manhattan Bridge Capital Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Manhattan Bridge Capital insiders own about US$12m worth of shares. That equates to 29% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Manhattan Bridge Capital Tell Us?

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. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in Manhattan Bridge Capital 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. For instance, we've identified 3 warning signs for Manhattan Bridge Capital (1 is a bit unpleasant) you should be aware of.

Of course Manhattan Bridge Capital 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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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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