Quite a few insiders invested in MarketWise, Inc. (NASDAQ:MKTW) last year which is positive news for shareholders

·3 min read

Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of MarketWise, Inc. (NASDAQ:MKTW), that sends out a positive message to the company's shareholders.

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.

See our latest analysis for MarketWise

MarketWise Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Chief Financial Officer R. Lynch for US$103k worth of shares, at about US$7.01 per share. That implies that an insider found the current price of US$7.21 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. The good news for MarketWise share holders is that insiders were buying at near the current price.

In the last twelve months MarketWise insiders were buying shares, but not selling. The average buy price was around US$7.79. I'd consider this a positive as it suggests insiders see value at around the current price. 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!

insider-trading-volume
insider-trading-volume

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

MarketWise Insiders Bought Stock Recently

It's good to see that MarketWise insiders have made notable investments in the company's shares. In total, insiders bought US$221k worth of shares in that time, and we didn't record any sales whatsoever. That shows some optimism about the company's future.

Does MarketWise Boast High 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data indicates that MarketWise insiders own about US$7.0m worth of shares (which is 0.3% of the company). We do generally prefer see higher levels of insider ownership.

So What Do The MarketWise Insider Transactions Indicate?

It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on MarketWise stock. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Case in point: We've spotted 2 warning signs for MarketWise you should be aware of.

But note: MarketWise 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, but not derivative transactions.

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.

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