Anyone interested in Mercer International Inc. (NASDAQ:MERC) should probably be aware that a company insider, Eric Heine, recently divested US$168k worth of shares in the company, at an average price of US$6.23 each. In particular, we note that the sale equated to a 57% reduction in their position size, which doesn't exactly instill confidence.
Mercer International Insider Transactions Over The Last Year
In fact, the recent sale by Eric Heine was the biggest sale of Mercer International shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at slightly below the current price (US$6.40). 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. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was 57% of Eric Heine's holding.
Over the last year, we can see that insiders have bought 43.30k shares worth US$266k. On the other hand they divested 26.91k shares, for US$168k. Overall, Mercer International insiders were net buyers during the last year. 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!
Mercer International is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
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. It appears that Mercer International insiders own 9.2% of the company, worth about US$39m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Mercer International Insider Transactions Indicate?
It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. Given that insiders also own a fair bit of Mercer International we think they are probably pretty confident of a bright future. 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 - Mercer International has 3 warning signs we think you should be aware of.
But note: Mercer International 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.
