We'd be surprised if MEI Pharma, Inc. (NASDAQ:MEIP) shareholders haven't noticed that the Independent Non-Executive Director, Frederick Driscoll, recently sold US$101k worth of stock at US$4.03 per share. The eyebrow raising move amounted to a reduction of 40% in their holding.
MEI Pharma Insider Transactions Over The Last Year
In fact, the recent sale by Frederick Driscoll was the biggest sale of MEI Pharma shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at around the current price of US$3.88. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.
The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
I will like MEI Pharma better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Does MEI Pharma Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 2.8% of MEI Pharma shares, worth about US$12m. 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 Do The MEI Pharma Insider Transactions Indicate?
An insider hasn't bought MEI Pharma stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We're in no rush to buy! While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. While conducting our analysis, we found that MEI Pharma has 3 warning signs and it would be unwise to ignore them.
But note: MEI Pharma 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, but not derivative transactions.
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