Quite a few insiders invested in MaxiPARTS Limited (ASX:MXI) last year which is positive news for shareholders

Simply Wall St
·3 min read

It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in MaxiPARTS Limited's (ASX:MXI) case, it's fantastic news for shareholders.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for MaxiPARTS

The Last 12 Months Of Insider Transactions At MaxiPARTS

In the last twelve months, the biggest single purchase by an insider was when Independent Non-Executive Director Gino Butera bought AU$103k worth of shares at a price of AU$2.08 per share. That means that an insider was happy to buy shares at above the current price of AU$1.83. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

MaxiPARTS insiders may have bought shares in the last year, but they didn't sell any. They paid about AU$2.68 on average. These transactions suggest that insiders have considered the current price attractive. 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!

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MaxiPARTS is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

MaxiPARTS Insiders Bought Stock Recently

Over the last quarter, MaxiPARTS insiders have spent a meaningful amount on shares. Overall, two insiders shelled out AU$113k for shares in the company -- and none sold. This makes one think the business has some good points.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Our data indicates that MaxiPARTS insiders own about AU$10m worth of shares (which is 12% of the company). But they may have an indirect interest through a corporate structure that we haven't picked up on. Whilst better than nothing, we're not overly impressed by these holdings.

So What Do The MaxiPARTS Insider Transactions Indicate?

It is good to see recent purchasing. And the longer term insider transactions also give us confidence. Insiders likely see value in MaxiPARTS shares, given these transactions (along with notable insider ownership of the company). In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing MaxiPARTS. Every company has risks, and we've spotted 5 warning signs for MaxiPARTS (of which 1 makes us a bit uncomfortable!) you should know about.

Of course MaxiPARTS 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, but not derivative transactions.

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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.