Insiders at Modiv Inc. (NYSE:MDV) recouped some losses this week after buying this year, still down US$122k

Some of the losses seen by insiders who purchased US$426k worth of Modiv Inc. (NYSE:MDV) shares over the past year were recovered after the stock increased by 20% over the past week. However, total losses seen by insiders are still US$122k but in since the time of purchase.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Our analysis indicates that MDV is potentially undervalued!

The Last 12 Months Of Insider Transactions At Modiv

Over the last year, we can see that the biggest insider purchase was by President Aaron Halfacre for US$141k worth of shares, at about US$17.65 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$11.79). Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

Modiv insiders may have bought shares in the last year, but they didn't sell any. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Modiv is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insiders At Modiv Have Bought Stock Recently

It's good to see that Modiv insiders have made notable investments in the company's shares. Not only was there no selling that we can see, but they collectively bought US$125k worth of shares. This makes one think the business has some good points.

Does Modiv Boast High Insider Ownership?

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Modiv insiders own about US$16m worth of shares. That equates to 14% of the company. 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 Does This Data Suggest About Modiv Insiders?

It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Modiv insiders are well aligned, and that they may think the share price is too low. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For instance, we've identified 2 warning signs for Modiv (1 makes us a bit uncomfortable) you should be aware of.

Of course Modiv 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. 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.