Have Mexco Energy Corporation (NYSEMKT:MXC) Insiders Been Selling Their Stock?

We note that the Mexco Energy Corporation (NYSEMKT:MXC) Independent Director, Thomas Decker, recently sold US$53k worth of stock for US$10.61 per share. It wasn't a huge sale, but it did reduce their holding by 14%. This does not instill confidence.

See our latest analysis for Mexco Energy

Mexco Energy Insider Transactions Over The Last Year

Notably, that recent sale by Independent Director Thomas Decker was not the only time they sold Mexco Energy shares this year. They previously made an even bigger sale of -US$78k worth of shares at a price of US$7.84 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$8.63. 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 20% of Thomas Decker's holding.

Over the last year, we can see that insiders have bought 22.61k shares worth US$65k. On the other hand they divested 29.60k shares, for US$244k. All up, insiders sold more shares in Mexco Energy than they bought, over the last year. The sellers received a price of around US$8.23, on average. It's not too encouraging to see that insiders have sold at below the current price. But we wouldn't put too much weight on the insider selling. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

I will like Mexco Energy better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership

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's great to see that Mexco Energy insiders own 59% of the company, worth about US$12m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Mexco Energy Insiders?

Insiders sold stock recently, but they haven't been buying. Despite some insider buying, the longer term picture doesn't make us feel much more positive. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. 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 example, Mexco Energy has 5 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.

Of course Mexco Energy 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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