CEO, MD & Executive Director Of Megaport Sold 100% Of Their Shares
Some Megaport Limited (ASX:MP1) shareholders may be a little concerned to see that the CEO, MD & Executive Director, Michael Reid, recently sold a substantial AU$6.9m worth of stock at a price of AU$20.63 per share. Probably the most concerning element of the whole transaction is that the disposal amounted to 100% of their entire holding.
The Last 12 Months Of Insider Transactions At Megaport
Notably, that recent sale by Michael Reid is the biggest insider sale of Megaport shares that we've seen in the last year. So it's clear an insider wanted to take some cash off the table, even below the current price of AU$22.34. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was 100% of Michael Reid's holding.
Happily, we note that in the last year insiders paid AU$203k for 12.22k shares. But insiders sold 335.34k shares worth AU$6.9m. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
View our latest analysis for Megaport
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).
Does Megaport Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company 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. Our data suggests Megaport insiders own 0.05% of the company, worth about AU$2.7m. We consider this fairly low insider ownership.
So What Does This Data Suggest About Megaport Insiders?
The insider sales have outweighed the insider buying, at Megaport, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. When you consider that most companies have higher levels of insider ownership, we're a little wary. So we'd only buy after very careful consideration. 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 3 warning signs for Megaport (of which 2 are a bit concerning!) you should know about.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.