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We often see insiders buying up shares in companies that perform well over the long term. 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 shareholders might well want to know whether insiders have been buying or selling shares in MarketAxess Holdings Inc. (NASDAQ:MKTX).
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
The Last 12 Months Of Insider Transactions At MarketAxess Holdings
The Chief Information Officer, Nicholas Themelis, made the biggest insider sale in the last 12 months. That single transaction was for US$2.4m worth of shares at a price of US$187 each. That means that even when the share price was below the current price of US$276, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 29.7% of Nicholas Themelis's holding.
We note that in the last year insiders divested 35560 shares for a total of US$7.4m. In the last year MarketAxess Holdings insiders didn't buy any company stock. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
I will like MarketAxess Holdings better if I see some big insider buys. While we wait, check out this freelist of growing companies with considerable, recent, insider buying.
Insiders at MarketAxess Holdings Have Sold Stock Recently
The last three months saw significant insider selling at MarketAxess Holdings. Specifically, insiders ditched US$2.9m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that MarketAxess Holdings insiders own 2.6% of the company, worth about US$268m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About MarketAxess Holdings Insiders?
Insiders sold MarketAxess Holdings shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. But since MarketAxess Holdings is profitable and growing, we're not too worried by this. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this freereport showing analyst forecasts for its future.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this freelist of interesting companies, that have HIGH return on equity and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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