In the last year, multiple insiders have substantially increased their holdings of Mercury Systems, Inc. (NASDAQ:MRCY) stock, indicating that insiders' optimism about the company's prospects has increased.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Mercury Systems Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when President William Ballhaus bought US$1.5m worth of shares at a price of US$37.57 per share. That means that even when the share price was higher than US$29.11 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

Happily, we note that in the last year insiders paid US$4.2m for 120.79k shares. On the other hand they divested 17.11k shares, for US$574k. In the last twelve months there was more buying than selling by Mercury Systems insiders. 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!

Mercury Systems is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

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 & Chief Human Resources Officer Steve Ratner dumped US$61k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

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. Insiders own 3.5% of Mercury Systems shares, worth about US$61m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Mercury Systems Insiders?

An insider sold stock recently, but they haven't been buying. On the other hand, the insider transactions over the last year are encouraging. We like that insiders own a fair amount of the company. So we're not overly bothered by recent selling. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.

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