Insiders' US$732.7k Investments In Red Following MSP Recovery's US$1.0m Dip In Market Value

The recent 23% drop in MSP Recovery, Inc.'s (NASDAQ:LIFW) stock could come as a blow to insiders who purchased US$732.7k worth of stock at an average buy price of US$0.56 over the past 12 months. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth US$140.9k, which is not great.

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

View our latest analysis for MSP Recovery

MSP Recovery Insider Transactions Over The Last Year

The CEO, President & Director John Ruiz made the biggest insider purchase in the last 12 months. That single transaction was for US$500k worth of shares at a price of US$1.14 each. That means that an insider was happy to buy shares at above the current price of US$0.11. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. John Ruiz was the only individual insider to buy during the last year.

John Ruiz bought 1.32m shares over the last 12 months at an average price of US$0.56. 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!

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

Insider Ownership Of MSP Recovery

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. From looking at our data, insiders own US$490k worth of MSP Recovery stock, about 3.0% of the company. We prefer to see high levels of insider ownership.

So What Does This Data Suggest About MSP Recovery Insiders?

It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on MSP Recovery stock. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing MSP Recovery. When we did our research, we found 5 warning signs for MSP Recovery (2 make us uncomfortable!) that we believe deserve your full attention.

But note: MSP Recovery may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.