We'd be surprised if Mercury Systems, Inc. (NASDAQ:MRCY) shareholders haven't noticed that the Executive VP, David Farnsworth, recently sold US$265k worth of stock at US$39.49 per share. However, the silver lining is that the sale only reduced their total holding by 5.3%, so we're hesitant to read anything much into it, on its own.

The Last 12 Months Of Insider Transactions At Mercury Systems

In the last twelve months, the biggest single purchase by an insider was when Independent Director Orlando Carvalho bought US$1.2m worth of shares at a price of US$34.18 per share. That implies that an insider found the current price of US$37.49 per share to be enticing. 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. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. Happily, the Mercury Systems insiders decided to buy shares at close to current prices.

Over the last year, we can see that insiders have bought 56.62k shares worth US$1.8m. On the other hand they divested 36.26k shares, for US$1.3m. Overall, Mercury Systems insiders were net buyers during the last year. 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!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. It appears that Mercury Systems insiders own 3.6% of the company, worth about US$78m. 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?

Insiders haven't bought Mercury Systems stock in the last three months, but there was some selling. In contrast, they appear keener if you look at the last twelve months. It's good to see insiders are shareholders. So the recent selling doesn't worry us too much. 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 Mercury Systems and we suggest you have a look.

But note: Mercury Systems may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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 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.