Over the last year, a good number of insiders have significantly increased their holdings in Medallion Financial Corp. (NASDAQ:MFIN). This is encouraging because it indicates that insiders are more optimistic about the company's prospects.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

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The Last 12 Months Of Insider Transactions At Medallion Financial

The insider Howard Amster made the biggest insider purchase in the last 12 months. That single transaction was for US$2.0m worth of shares at a price of US$10.29 each. That means that even when the share price was higher than US$8.29 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

Medallion Financial insiders may have bought shares in the last year, but they didn't sell any. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

Check out our latest analysis for Medallion Financial

Medallion Financial is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

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 Medallion Financial insiders own 26% of the company, worth about US$48m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Medallion Financial Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Medallion Financial shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Medallion Financial and their transactions don't cause us concern. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Medallion Financial. When we did our research, we found 3 warning signs for Medallion Financial (1 is a bit concerning!) that we believe deserve your full attention.

Of course Medallion Financial 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.