When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Montrose Environmental Group, Inc.'s (NYSE:MEG) instance, it's good news for shareholders.

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.

Montrose Environmental Group Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Independent Director J. Miguel de Castro bought US$329k worth of shares at a price of US$32.94 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$39.52. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

Montrose Environmental Group insiders may have bought shares in the last year, but they didn't sell any. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

Montrose Environmental Group 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.

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. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Montrose Environmental Group insiders own 6.8% of the company, worth about US$89m. 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 Do The Montrose Environmental Group Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Montrose Environmental Group shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in Montrose Environmental Group and their transactions don't cause us concern. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. While conducting our analysis, we found that Montrose Environmental Group has 2 warning signs and it would be unwise to ignore these.

But note: Montrose Environmental Group 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com