We wouldn't blame Merchants Bancorp (NASDAQ:MBIN) shareholders if they were a little worried about the fact that Randall Rogers, the Vice Chairman recently netted about US$4.4m selling shares at an average price of US$31.61. However, that sale only accounted for 4.1% of their holding, so arguably it doesn't say much about their conviction.
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The Last 12 Months Of Insider Transactions At Merchants Bancorp
Notably, that recent sale by Randall Rogers is the biggest insider sale of Merchants Bancorp shares that we've seen in the last year. So what is clear is that an insider saw fit to sell at around the current price of US$31.20. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.
In the last twelve months insiders purchased 12.00k shares for US$289k. But insiders sold 173.63k shares worth US$5.5m. Over the last year we saw more insider selling of Merchants Bancorp shares, than buying. 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!
I will like Merchants Bancorp better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insider Ownership Of Merchants Bancorp
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Merchants Bancorp insiders own about US$548m worth of shares (which is 41% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At Merchants Bancorp Tell Us?
Insiders sold stock recently, but they haven't been buying. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But it is good to see that Merchants Bancorp is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example, Merchants Bancorp has 2 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.