Investors who take an interest in MainStreet Bancshares, Inc. (NASDAQ:MNSB) should definitely note that the Director of MainStreet Bank, Ali Manouchehri, recently paid US$20.69 per share to buy US$103k worth of the stock. We reckon that's a good sign, especially since the purchase boosted their holding by 279%.

View our latest analysis for MainStreet Bancshares

MainStreet Bancshares Insider Transactions Over The Last Year

In fact, the recent purchase by Ali Manouchehri was the biggest purchase of MainStreet Bancshares shares made by an insider individual in the last twelve months, according to our records. That means that an insider was happy to buy shares at above the current price of US$20.46. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. 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.

In the last twelve months insiders purchased 14.03k shares for US$257k. But insiders sold 2.89k shares worth US$53k. In total, MainStreet Bancshares insiders bought more than they sold over the last year. The average buy price was around US$18.34. To my mind it is good that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

MainStreet Bancshares is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insider Ownership Of MainStreet Bancshares

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 10% of MainStreet Bancshares shares, worth about US$15m. 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 Do The MainStreet Bancshares Insider Transactions Indicate?

The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest MainStreet Bancshares 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. At Simply Wall St, we found 1 warning sign for MainStreet Bancshares that deserve your attention before buying any shares.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.