Insiders who acquired US$732.7k worth of MSP Recovery, Inc.'s (NASDAQ:LIFW) stock at an average price of US$0.56 in the past 12 months may be dismayed by the recent 15% price decline. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth US$146.2k which is not ideal.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for MSP Recovery

The Last 12 Months Of Insider Transactions At MSP Recovery

The CEO, President & Director John Ruiz made the biggest insider purchase in the last 12 months. That single transaction was for US$500k worth of shares at a price of US$1.14 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$0.11). 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. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. John Ruiz was the only individual insider to buy shares in the last twelve months.

John Ruiz bought a total of 1.32m shares over the year at an average price of US$0.56. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Our data suggests MSP Recovery insiders own 3.0% of the company, worth about US$462k. I generally like to see higher levels of ownership.

So What Does This Data Suggest About MSP Recovery Insiders?

The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that MSP Recovery insiders are reasonably well aligned, and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing MSP Recovery. At Simply Wall St, we've found that MSP Recovery has 5 warning signs (2 shouldn't be ignored!) that deserve your attention before going any further with your analysis.

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.