Yahoo Finance Insiders saw their CA$1.7m investment bump up to CA$2.0m after Martinrea International Inc. (TSE:MRE) soared 11% last week
Martinrea International Inc. (TSE:MRE) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 11%, resulting in a CA$83m rise in the company's market capitalisation. As a result, the stock they originally bought for CA$1.7m is now worth CA$2.0m.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
See our latest analysis for Martinrea International
The Last 12 Months Of Insider Transactions At Martinrea International
Over the last year, we can see that the biggest insider purchase was by President Frank D'Eramo for CA$323k worth of shares, at about CA$8.22 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of CA$10.34. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
Martinrea International insiders may have bought shares in the last year, but they didn't sell any. Their average price was about CA$9.27. To my mind it is good that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Martinrea International 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.
Insiders At Martinrea International Have Bought Stock Recently
It's good to see that Martinrea International insiders have made notable investments in the company's shares. Overall, two insiders shelled out CA$90k for shares in the company -- and none sold. That shows some optimism about the company's future.
Insider Ownership
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Martinrea International insiders own about CA$14m worth of shares. That equates to 1.7% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Martinrea International Insider Transactions Indicate?
The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. Given that insiders also own a fair bit of Martinrea International we think they are probably pretty confident of a bright future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 4 warning signs for Martinrea International (1 is concerning!) that we believe deserve your full attention.
But note: Martinrea International 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
