Last week, MoneyLion Inc.'s (NYSE:ML) stock jumped 12%, but insiders who sold US$1.5m worth of stock in over the past year are likely to be in a better position. Selling at an average price of US$29.73, which is higher than the current price might have been the right call as holding on to stock would have meant their investment would be worth less now than it was at the time of sale.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
MoneyLion Insider Transactions Over The Last Year
The Co-Founder, Diwakar Choubey, made the biggest insider sale in the last 12 months. That single transaction was for US$575k worth of shares at a price of US$34.25 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$52.16. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 2.7% of Diwakar Choubey's holding.
In the last twelve months insiders purchased 3.18k shares for US$51k. But insiders sold 50.55k shares worth US$1.5m. In total, MoneyLion insiders sold more than they bought over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insider Ownership Of MoneyLion
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. MoneyLion insiders own 21% of the company, currently worth about US$115m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About MoneyLion Insiders?
It doesn't really mean much that no insider has traded MoneyLion shares in the last quarter. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the MoneyLion insiders selling. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. While conducting our analysis, we found that MoneyLion has 2 warning signs and it would be unwise to ignore them.
But note: MoneyLion may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.