When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Mach7 Technologies Limited’s (ASX:M7T) instance, it’s good news for shareholders.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
Check out our latest analysis for Mach7 Technologies
Over the last year, we can see that the biggest insider purchase was by Independent Non-Executive Director Rebecca Thompson for AU$148k worth of shares, at about AU$0.37 per share. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.36). It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. 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 Mach7 Technologies insiders bought shares during the last year, they didn’t sell. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Mach7 Technologies is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
It’s good to see that Mach7 Technologies insiders have made notable investments in the company’s shares. In total, insiders bought AU$214k worth of shares in that time, and we didn’t record any sales whatsoever. That shows some optimism about the company’s future.
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. From looking at our data, insiders own AU$4.0m worth of Mach7 Technologies stock, about 4.6% of the company. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. We consider this fairly low insider ownership.
The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Mach7 Technologies insiders are expecting a bright future. While it’s good to be aware of what’s going on with the insider’s ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To assist with this, we’ve discovered 1 warning sign that you should run your eye over to get a better picture of Mach7 Technologies.
