Insiders who bought Motorcar Parts of America, Inc. (NASDAQ:MPAA) in the last 12 months may probably not pay attention to the stock's recent 11% drop. After accounting for the recent loss, the US$1.16m worth of shares they purchased is now worth US$2.03m, suggesting a good return on their investment.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At Motorcar Parts of America
Over the last year, we can see that the biggest insider purchase was by Director Douglas Trussler for US$874k worth of shares, at about US$5.86 per share. Even though the purchase was made at a significantly lower price than the recent price (US$10.32), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
While Motorcar Parts of America insiders bought shares during the last year, they didn't sell. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Check out our latest analysis for Motorcar Parts of America
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.
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. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 6.1% of Motorcar Parts of America shares, worth about US$12m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Does This Data Suggest About Motorcar Parts of America Insiders?
It doesn't really mean much that no insider has traded Motorcar Parts of America shares in the last quarter. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in Motorcar Parts of America and their transactions don't cause us concern. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example, Motorcar Parts of America has 2 warning signs (and 1 which is potentially serious) we think you should know about.
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 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.