Yahoo Finance Great news for Medallion Financial Corp. (NASDAQ:MFIN): Insiders acquired stock in large numbers last year
Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Medallion Financial Corp. (NASDAQ:MFIN), that sends out a positive message to the company's shareholders.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
See our latest analysis for Medallion Financial
The Last 12 Months Of Insider Transactions At Medallion Financial
The insider David Orr made the biggest insider purchase in the last 12 months. That single transaction was for US$116k worth of shares at a price of US$7.41 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$7.13). Their view may have changed since then, but at least it shows they felt optimistic at the time. 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. Notably David Orr was also the biggest seller.
Happily, we note that in the last year insiders paid US$285k for 36.30k shares. But they sold 8.90k shares for US$23k. In the last twelve months there was more buying than selling by Medallion Financial insiders. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Medallion Financial is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership
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. It appears that Medallion Financial insiders own 22% of the company, worth about US$35m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Medallion Financial Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Medallion Financial shares in the last quarter. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in Medallion Financial and their transactions don't cause us concern. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we've found that Medallion Financial has 3 warning signs (2 don't sit too well with us!) that deserve your attention before going any further with your analysis.
But note: Medallion Financial 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, but not derivative transactions.
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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.
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