Those following along with MHM Automation Limited (NZSE:MHM) will no doubt be intrigued by the recent purchase of shares by Colin Neal, Non-Executive Director of the company, who spent a stonking NZ$1.1m on stock at an average price of NZ$0.70. Aside from being a solid chunk in its own right, the deft move also saw their holding increase by some 21%.
The Last 12 Months Of Insider Transactions At MHM Automation
Notably, that recent purchase by Colin Neal is the biggest insider purchase of MHM Automation shares that we've seen in the last year. So it's clear an insider wanted to buy, at around the current price, which is NZ$0.76. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. Happily, the MHM Automation insider decided to buy shares at close to current prices. Colin Neal was the only individual insider to buy during the last year.
You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
MHM Automation is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does MHM Automation Boast High 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. MHM Automation insiders own 51% of the company, currently worth about NZ$25m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The MHM Automation Insider Transactions Indicate?
It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about MHM Automation. That's what I like to see! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. You'd be interested to know, that we found 2 warning signs for MHM Automation and we suggest you have a look.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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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