Should You Take Comfort From Insider Transactions At Maiden Holdings, Ltd. (NASDAQ:MHLD)?

By
Simply Wall St
Published
August 06, 2019
NasdaqCM:MHLD

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 we'll take a look at whether insiders have been buying or selling shares in Maiden Holdings, Ltd. (NASDAQ:MHLD).

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 in the company. However, rules govern insider transactions, and certain disclosures are required.

We don't think shareholders should simply follow insider transactions. 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 Maiden Holdings

Maiden Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Director Yehuda Neuberger bought US$160k worth of shares at a price of US$0.82 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$0.64). 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 if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

Over the last year, we can see that insiders have bought 395k shares worth US$332k. But insiders sold 31500 shares worth US$81k. In the last twelve months there was more buying than selling by Maiden Holdings insiders. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

NasdaqGS:MHLD Recent Insider Trading, August 6th 2019
NasdaqGS:MHLD Recent Insider Trading, August 6th 2019

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 17% of Maiden Holdings shares, worth about US$8.9m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Maiden Holdings Insiders?

The fact that there have been no Maiden Holdings insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. Insiders own shares in Maiden Holdings and we see no evidence to suggest they are worried about the future. Of course, the future is what matters most. So if you are interested in Maiden Holdings, you should check out this free report on analyst forecasts for the company.

Of course Maiden Holdings 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.

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 editorial-team@simplywallst.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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