Who Has Been Buying MGE Energy, Inc. (NASDAQ:MGEE) Shares?
We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we'll take a look at whether insiders have been buying or selling shares in MGE Energy, Inc. (NASDAQ:MGEE).
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.
Check out our latest analysis for MGE Energy
The Last 12 Months Of Insider Transactions At MGE Energy
In the last twelve months, the biggest single purchase by an insider was when Independent Director James Berbee bought US$63k worth of shares at a price of US$66.92 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$61.66). Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
While MGE Energy insiders bought shares during the last year, they didn't sell. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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).
Insiders at MGE Energy Have Bought Stock Recently
Over the last quarter, MGE Energy insiders have spent a meaningful amount on shares. Overall, four insiders shelled out US$119k for shares in the company -- and none sold. This could be interpreted as suggesting a positive outlook.
Does MGE Energy Boast High 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. I reckon it's a good sign if insiders own a significant number of shares in the company. From looking at our data, insiders own US$3.9m worth of MGE Energy stock, about 0.2% of the company. We consider this fairly low insider ownership.
What Might The Insider Transactions At MGE Energy Tell Us?
It is good to see recent purchasing. And the longer term insider transactions also give us confidence. 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 MGE Energy stock. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing MGE Energy. While conducting our analysis, we found that MGE Energy has 2 warning signs and it would be unwise to ignore them.
Of course MGE Energy 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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