Insider Buying: The Mercury Systems, Inc. (NASDAQ:MRCY) Independent Director Just Bought 133% More Shares

·3 min read

Investors who take an interest in Mercury Systems, Inc. (NASDAQ:MRCY) should definitely note that the Independent Director, Howard Lance, recently paid US$50.59 per share to buy US$253k worth of the stock. That certainly has us anticipating the best, especially since they thusly increased their own holding by 133%, potentially signalling some real optimism.

View our latest analysis for Mercury Systems

Mercury Systems Insider Transactions Over The Last Year

The insider James Albaugh made the biggest insider purchase in the last 12 months. That single transaction was for US$736k worth of shares at a price of US$50.81 each. That means that even when the share price was higher than US$50.23 (the recent price), an insider wanted to purchase shares. 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. 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.

In the last twelve months insiders purchased 25.27k shares for US$1.2m. On the other hand they divested 1.51k shares, for US$75k. Overall, Mercury Systems insiders were net buyers during the last year. 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!

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insider-trading-volume

Mercury Systems is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Mercury Systems insiders own 3.1% of the company, worth about US$90m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Mercury Systems Insiders?

The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest Mercury Systems insiders are well aligned, and that they may think the share price is too low. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 3 warning signs for Mercury Systems you should know about.

Of course Mercury Systems 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.

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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.

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