Quite a few insiders have dramatically grown their holdings in Mpact Limited (JSE:MPT) over the past 12 months. An insider's optimism about the company's prospects is a positive sign.
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.
See our latest analysis for Mpact
Mpact Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by CEO & Executive Director Bruce Strong for R14m worth of shares, at about R29.20 per share. That means that an insider was happy to buy shares at around the current price of R29.80. Of course they may have changed their mind. But this suggests they are optimistic. 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. Notably Bruce Strong was also the biggest seller.
Over the last year, we can see that insiders have bought 1.59m shares worth R46m. But they sold 1.37m shares for R40m. Overall, Mpact insiders were net buyers during the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
Mpact is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Mpact Insiders Are Selling The Stock
Over the last three months, we've seen significant insider selling at Mpact. In total, insiders sold R3.1m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.
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. We usually like to see fairly high levels of insider ownership. Our data indicates that Mpact insiders own about R126m worth of shares (which is 2.9% of the company). We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Whilst better than nothing, we're not overly impressed by these holdings.
What Might The Insider Transactions At Mpact Tell Us?
Insiders sold stock recently, but they haven't been buying. But we take heart from prior transactions. On top of that, insiders own a significant portion of the company. So we're not too bothered by recent selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Mpact. In terms of investment risks, we've identified 3 warning signs with Mpact and understanding these should be part of your investment process.