Me Today Insider Confidence Rewarded, Stock Hits NZ$11m Market Cap
Me Today Limited (NZSE:MEE) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 37%, resulting in a NZ$2.9m rise in the company's market capitalisation, translating to a gain of 90% on their initial investment. In other words, the original NZ$500.0k purchase is now worth NZ$950.0k.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Me Today Insider Transactions Over The Last Year
The Co-Founder Stephen Sinclair made the biggest insider purchase in the last 12 months. That single transaction was for NZ$500k worth of shares at a price of NZ$0.06 each. Even though the purchase was made at a significantly lower price than the recent price (NZ$0.11), we still think insider buying is a positive. 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.
You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
See our latest analysis for Me Today
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
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Me Today insiders own 72% of the company, currently worth about NZ$7.8m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About Me Today Insiders?
The fact that there have been no Me Today insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. With high insider ownership and encouraging transactions, it seems like Me Today insiders think the business has merit. 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. Every company has risks, and we've spotted 4 warning signs for Me Today (of which 3 don't sit too well with us!) you should know about.
Of course Me Today may not be the best stock to buy. So you may wish to see this free collection of high quality 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.