Insider Spends US$211k Buying More Shares In Methode Electronics

Potential Methode Electronics, Inc. (NYSE:MEI) shareholders may wish to note that the President, Jonathan DeGaynor, recently bought US$211k worth of stock, paying US$6.46 for each share. That's a very solid buy in our book, and increased their holding by a noteworthy 25%.

See our latest analysis for Methode Electronics

Methode Electronics Insider Transactions Over The Last Year

Notably, that recent purchase by Jonathan DeGaynor is the biggest insider purchase of Methode Electronics shares that we've seen in the last year. That means that even when the share price was higher than US$6.14 (the recent price), 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. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

While Methode Electronics insiders bought shares during the last year, they didn't sell. Their average price was about US$8.11. I'd consider this a positive as it suggests insiders see value at around the current price. The chart below shows insider transactions (by companies and 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!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership Of Methode Electronics

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. Insiders own 3.0% of Methode Electronics shares, worth about US$6.7m, according to our data. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Do The Methode Electronics Insider Transactions Indicate?

The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Methode Electronics insiders are reasonably well aligned, and optimistic for the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 2 warning signs for Methode Electronics (1 is a bit concerning!) and we strongly recommend you look at these before investing.

But note: Methode Electronics 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.