Anyone interested in Merchants Bancorp (NASDAQ:MBIN) should probably be aware that the Co-Founder, Michael Petrie, recently divested US$497k worth of shares in the company, at an average price of US$55.20 each. However, the silver lining is that the sale only reduced their total holding by 0.07%, so we're hesitant to read anything much into it, on its own.

Merchants Bancorp Insider Transactions Over The Last Year

In fact, the recent sale by Co-Founder Michael Petrie was not their only sale of Merchants Bancorp shares this year. They previously made an even bigger sale of -US$1.8m worth of shares at a price of US$46.86 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$55.72. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 0.3% of Michael Petrie's stake.

Happily, we note that in the last year insiders paid US$565k for 17.75k shares. But they sold 77.53k shares for US$3.7m. Over the last year we saw more insider selling of Merchants Bancorp shares, than buying. 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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

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. It's great to see that Merchants Bancorp insiders own 47% of the company, worth about US$1.2b. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Merchants Bancorp Tell Us?

Insiders haven't bought Merchants Bancorp stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn't bring confidence, either. On the plus side, Merchants Bancorp makes money, and is growing profits. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Merchants Bancorp.

Of course Merchants Bancorp 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.

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.