Several Insiders Invested In Metrofile Holdings Flagging Positive News

It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Metrofile Holdings Limited's (JSE:MFL) case, it's fantastic news for shareholders.

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.

Check out our latest analysis for Metrofile Holdings

The Last 12 Months Of Insider Transactions At Metrofile Holdings

The Group CEO & Independent Non-Executive Director Thabo Stanley Seopa made the biggest insider purchase in the last 12 months. That single transaction was for R1.8m worth of shares at a price of R2.22 each. So it's clear an insider wanted to buy, at around the current price, which is R2.25. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. In this case we're pleased to report that the insider purchases were made at close to current prices.

In the last twelve months Metrofile Holdings insiders were buying shares, but not selling. 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!

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).

Metrofile Holdings Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at Metrofile Holdings. Not only was there no selling that we can see, but they collectively bought R3.0m worth of shares. This is a positive in our book as it implies some confidence.

Does Metrofile Holdings Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data isn't picking up on much insider ownership at Metrofile Holdings, though insiders do hold about R3.7m worth of shares. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It's always possible we are missing something but from our data, it looks like insider ownership is minimal.

So What Do The Metrofile Holdings Insider Transactions Indicate?

The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Metrofile Holdings insiders are expecting a bright future. 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. Our analysis shows 6 warning signs for Metrofile Holdings (2 are concerning!) and we strongly recommend you look at these before investing.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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 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.