Mercury Systems, Inc. (NASDAQ:MRCY) shareholders may have reason to be concerned, as several insiders sold their shares over the past year. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, if numerous insiders are selling, shareholders should investigate more.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

The Last 12 Months Of Insider Transactions At Mercury Systems

The Executive VP & CFO, David Farnsworth, made the biggest insider sale in the last 12 months. That single transaction was for US$265k worth of shares at a price of US$39.49 each. That means that an insider was selling shares at around the current price of US$39.33. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

Over the last year, we can see that insiders have bought 21.62k shares worth US$599k. But they sold 32.87k shares for US$1.2m. All up, insiders sold more shares in Mercury Systems than they bought, 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 want to know exactly who sold, for how much, and when, simply click on the graph below!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insiders At Mercury Systems Have Sold Stock Recently

Over the last three months, we've seen significant insider selling at Mercury Systems. In total, Executive VP & COO Charles Wells sold US$59k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Does Mercury Systems 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. 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 appears that Mercury Systems insiders own 2.0% of the company, worth about US$45m. 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 Does This Data Suggest About Mercury Systems Insiders?

An insider hasn't bought Mercury Systems stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn't bring confidence, either. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. So we'd only buy after careful consideration. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Mercury Systems.

Of course Mercury Systems 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 of direct interests only, but not derivative transactions or indirect interests.

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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.