Methode Electronics Gains 10%, Insider Trades Reap Benefit

Methode Electronics, Inc. (NYSE:MEI) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 10%, resulting in a US$24m rise in the company's market capitalisation, translating to a gain of 14% on their initial investment. Put another way, the original US$312.7k acquisition is now worth US$355.8k.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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The Last 12 Months Of Insider Transactions At Methode Electronics

In the last twelve months, the biggest single purchase by an insider was when President Jonathan DeGaynor bought US$211k worth of shares at a price of US$6.46 per share. We do like to see buying, but this purchase was made at well below the current price of US$7.43. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

While Methode Electronics insiders bought shares during the last year, they didn't sell. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

View our latest analysis for Methode Electronics

Methode Electronics is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

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. A high insider ownership often makes company leadership more mindful of shareholder interests. From looking at our data, insiders own US$3.6m worth of Methode Electronics stock, about 1.4% of the company. We consider this fairly low insider ownership.

So What Does This Data Suggest About Methode Electronics Insiders?

It doesn't really mean much that no insider has traded Methode Electronics shares in the last quarter. However, our analysis of transactions over the last year is heartening. We'd like to see bigger individual holdings. However, we don't see anything to make us think Methode Electronics insiders are doubting the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Methode Electronics. While conducting our analysis, we found that Methode Electronics has 1 warning sign and it would be unwise to ignore this.

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.

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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.