Those following along with Macy's, Inc. (NYSE:M) will no doubt be intrigued by the recent purchase of shares by Paul Varga, Independent Director of the company, who spent a stonking US$511k on stock at an average price of US$15.42. That increased their holding by a full 3,896%, which arguably implies the sort of confidence required for a shy sweet-natured nerd to ask the most popular kid in the school to go out on a date.
The Last 12 Months Of Insider Transactions At Macy's
In fact, the recent purchase by Paul Varga was the biggest purchase of Macy's shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$15.32). Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares is very important. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Paul Varga was the only individual insider to buy shares in the last twelve months.
The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Macy's is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of Macy's
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. We usually like to see fairly high levels of insider ownership. Insiders own 0.1% of Macy's shares, worth about US$6.0m, according to our data. We do generally prefer see higher levels of insider ownership.
So What Does This Data Suggest About Macy's Insiders?
It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Macy's insiders are reasonably well aligned, and optimistic for the 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. To help with this, we've discovered 2 warning signs (1 can't be ignored!) that you ought to be aware of before buying any shares in Macy's.
Of course Macy's 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.
This article by Simply Wall St is general in nature. 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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