We wouldn't blame MeridianLink, Inc. (NYSE:MLNK) shareholders if they were a little worried about the fact that Timothy Nguyen, the Chief Strategy Officer recently netted about US$2.7m selling shares at an average price of US$23.44. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 1.0%.
MeridianLink Insider Transactions Over The Last Year
In fact, the recent sale by Chief Strategy Officer Timothy Nguyen was not their only sale of MeridianLink shares this year. Earlier in the year, they fetched US$18.29 per share in a -US$30m sale. So it's clear an insider wanted to take some cash off the table, even below the current price of US$22.02. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 12% of Timothy Nguyen's holding.
Timothy Nguyen divested 1.81m shares over the last 12 months at an average price of US$18.74. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
I will like MeridianLink better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider 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. I reckon it's a good sign if insiders own a significant number of shares in the company. MeridianLink insiders own about US$321m worth of shares (which is 19% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The MeridianLink Insider Transactions Indicate?
An insider sold MeridianLink shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. 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. Every company has risks, and we've spotted 1 warning sign for MeridianLink you should know about.
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 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.
