Trade Alert: The Independent Chairman of the Board Of McPherson's Limited (ASX:MCP), Graham Cubbin, Has Just Spent AU$124k Buying Shares

Even if it's not a huge purchase, we think it was good to see that Graham Cubbin, the Independent Chairman of the Board of McPherson's Limited (ASX:MCP) recently shelled out AU$124k to buy stock, at AU$1.77 per share. That purchase might not be huge but it did increase their holding by 35%.

Check out our latest analysis for McPherson's

The Last 12 Months Of Insider Transactions At McPherson's

In fact, the recent purchase by Graham Cubbin was the biggest purchase of McPherson's shares made by an insider individual in the last twelve months, according to our records. That means that an insider was happy to buy shares at above the current price of AU$1.72. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays 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. Graham Cubbin was the only individual insider to buy over the year.

You can see a visual depiction of insider transactions (by 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!

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).

Insider Ownership of McPherson's

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 indicates that McPherson's insiders own about AU$9.8m worth of shares (which is 5.3% of the company). We do generally prefer see higher levels of insider ownership.

So What Does This Data Suggest About McPherson'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. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that McPherson's insiders are reasonably well aligned, and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing McPherson's. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of McPherson's.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.