Yahoo Finance Insiders who bought MercadoLibre, Inc. (NASDAQ:MELI) last year must be regretting not buying more as market cap hits US$47b
MercadoLibre, Inc. (NASDAQ:MELI) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 6.4% resulting in a US$2.8b addition to the company’s market value. As a result, the stock they originally bought for US$249k is now worth US$253k.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for MercadoLibre
MercadoLibre Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Executive VP of Corporate Affairs & President of Argentina Juan De La Serna for US$201k worth of shares, at about US$939 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$939). It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
In the last twelve months insiders purchased 270.00 shares for US$249k. On the other hand they divested 75.00 shares, for US$76k. In total, MercadoLibre insiders bought more than they sold over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Does MercadoLibre Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that MercadoLibre insiders own 0.3% of the company, worth about US$131m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About MercadoLibre Insiders?
It doesn't really mean much that no insider has traded MercadoLibre shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. It would be great to see more insider buying, but overall it seems like MercadoLibre insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing MercadoLibre. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of MercadoLibre.
Of course MercadoLibre may not be the best stock to buy. So you may wish to see this free collection of high quality 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, 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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