Yahoo Finance Having purchased UK£1.0m worth of MJ Hudson Group plc (LON:MJH) stock, the recent 31% pullback is not what insiders may have expected
The recent 31% drop in MJ Hudson Group plc's (LON:MJH) stock could come as a blow to insiders who purchased UK£1.0m worth of stock at an average buy price of UK£0.32 over the past 12 months. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth UK£530k, which is not great.
While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.
See our latest analysis for MJ Hudson Group
MJ Hudson Group Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Founder Matthew Hudson bought UK£846k worth of shares at a price of UK£0.30 per share. That means that an insider was happy to buy shares at above the current price of UK£0.16. 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.
While MJ Hudson Group insiders bought shares during the last year, they didn't sell. 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!
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).
Insiders At MJ Hudson Group Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at MJ Hudson Group. In total, insiders bought UK£866k worth of shares in that time, and we didn't record any sales whatsoever. This makes one think the business has some good points.
Does MJ Hudson Group Boast High 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. MJ Hudson Group insiders own about UK£11m worth of shares. That equates to 35% 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.
What Might The Insider Transactions At MJ Hudson Group Tell Us?
The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Insiders likely see value in MJ Hudson Group shares, given these transactions (along with notable insider ownership of the company). While we like knowing 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 3 warning signs that you should run your eye over to get a better picture of MJ Hudson Group.
Of course MJ Hudson Group 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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