Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Maximus, Inc. (NYSE:MMS), that sends out a positive message to the company's shareholders.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Maximus

The Last 12 Months Of Insider Transactions At Maximus

The Independent Chairman John Haley made the biggest insider purchase in the last 12 months. That single transaction was for US$250k worth of shares at a price of US$71.76 each. That implies that an insider found the current price of US$77.50 per share to be enticing. 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. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for Maximus share holders is that insiders were buying at near the current price.

Happily, we note that in the last year insiders paid US$772k for 10.78k shares. But they sold 2.21k shares for US$163k. Overall, Maximus 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. By clicking on the graph below, you can see the precise details of each insider transaction!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Maximus Insiders Bought Stock Recently

There has been significantly more insider buying, than selling, at Maximus, over the last three months. Insiders spent US$754k on shares. But Chief Human Resources Officer Michelle Link sold shares worth US$163k. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.

Does Maximus Boast High Insider Ownership?

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. It appears that Maximus insiders own 1.1% of the company, worth about US$52m. 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 Maximus Insider Transactions Indicate?

The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. Given that insiders also own a fair bit of Maximus we think they are probably pretty confident of a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Maximus. In terms of investment risks, we've identified 1 warning sign with Maximus and understanding this should be part of your investment process.

Of course Maximus 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.