Anyone interested in Medifast, Inc. (NYSE:MED) should probably be aware that the Independent Director, Scott Schlackman, recently divested US$109k worth of shares in the company, at an average price of US$39.46 each. The eyebrow raising move amounted to a reduction of 37% in their holding.
Medifast Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the insider, Constance Hallquist, sold US$415k worth of shares at a price of US$73.87 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of US$34.57. So it may not shed much light on insider confidence at current levels.
In the last twelve months insiders purchased 675.43 shares for US$55k. On the other hand they divested 8.37k shares, for US$523k. In total, Medifast insiders sold more than they bought over the last year. The average sell price was around US$62.55. It is certainly not great to see that insiders have sold shares in the company. But the selling was at much higher prices than the current share price (US$34.57), so it probably doesn't tell us a lot about the value on offer today. 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 like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Does Medifast Boast High Insider Ownership?
Many investors like to check how much of a company is owned by 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. From our data, it seems that Medifast insiders own 1.8% of the company, worth about US$7.0m. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
What Might The Insider Transactions At Medifast Tell Us?
An insider sold Medifast shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. When you consider that most companies have higher levels of insider ownership, we're a little wary. So we'd only buy after very careful consideration. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. When we did our research, we found 2 warning signs for Medifast (1 shouldn't be ignored!) that we believe deserve your full attention.
Of course Medifast 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 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.