We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Minerals Technologies Inc. (NYSE:MTX), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
We don’t think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. 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’.
The Last 12 Months Of Insider Transactions At Minerals Technologies
Director John Carmola made the biggest insider purchase in the last 12 months. That single transaction was for US$54k worth of shares at a price of US$68.00 each. That means that even when the share price was higher, an insider wanted to purchase shares. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. We generally consider it a positive if insiders have been buying on market, even above the current price.
Over the last year, we can see that insiders have bought 2.25k shares worth US$153k. Overall, Minerals Technologies insiders were net buyers last year. They paid about US$67.84 on average. I’d consider this a positive as it suggests insiders see value at around the current price, which is US$58.77. 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!
Minerals Technologies is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Minerals Technologies Insiders Bought Stock Recently
Over the last three months, we’ve seen a bit of insider buying at Minerals Technologies. Insiders purchased US$35k worth of shares in that period. It’s good to see the insider buying, as well as the lack of recent sellers. But the amount invested in the last three months isn’t enough for us too put much weight on it, as a single factor.
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. I reckon it’s a good sign if insiders own a significant number of shares in the company. It appears that Minerals Technologies insiders own 1.0% of the company, worth about US$20m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Do The Minerals Technologies Insider Transactions Indicate?
Our data shows a little more insider buying than selling in the last three months. But the difference isn’t much. On a brighter note, the transactions over the last year are encouraging. Overall we don’t see anything to make us think Minerals Technologies insiders are doubting the company, and they do own shares. Of course, the future is what matters most. So if you are interested in Minerals Technologies, you should check out this free report on analyst forecasts for the company.
But note: Minerals Technologies 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.
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