Simply Wall St

As Marpai, Inc. (NASDAQ:MRAI) drops to $19 million market cap, insiders may rethink their $1.2 million stock purchase earlier this year

Insiders who acquired $1.2 million of Marpai, Inc. (NASDAQ:MRAI) at an average price of US$1.16 over the past 12 months might be dismayed by the recent 11% price drop. Insiders buy in the hope that their investments will increase in value over time. However, due to recent losses, their initial investment is now only worth US$983,000, which is not huge.

While we don’t believe shareholders should simply follow insider trading, we would consider it foolish to ignore insider trading altogether.

Check opportunities and risks within the American insurance industry.

Marpai insider trades over the past year

In the past twelve months, the largest single insider purchase was when director Damien Lamendola bought US$312,000 worth of stock at US$1.12 per share. This means that even when the stock price was above $0.93 (the recent price), an insider wanted to buy stock. Their perspective may have changed since then, but it at least shows that they were feeling optimistic at the time. In our view, the price an insider pays for a stock is very important. It is generally more encouraging if they paid above the current price, as this suggests that they perceived value even at higher levels.

Over the past twelve months, Marpai insiders were buying stocks, but not selling. You can see insider trading (by companies and individuals) over the past year illustrated in the table below. If you click on the chart, you can see all individual trades including stock price, individual and date!

NasdaqCM: MRAI Insider Trading Volume December 4, 2022

Marpai isn’t the only insider stock to buy. So take a look at this free list of growing companies with insider buying.

Marpai insiders recently bought shares

Over the past quarter, Marpai insiders have spent a significant amount on stocks. In total, insiders bought US$108,000 worth of shares at that time, and we had no sales. This shows some optimism about the future of the company.

Marpai Insider Property

I like to look at how many shares insiders own in a company, to help me get a sense of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely insiders will be incentivized to build the company for the long term. Insiders own 39% of Marpai shares, worth approximately $7.7 million. We have certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest an alignment between insiders and other shareholders.

So what does this data suggest about Marpai insiders?

Good to see recent purchases. And an analysis of last year’s transactions also gives us confidence. But we don’t feel the same way about the company making losses. When combined with notable insider ownership, these factors suggest that Marpai insiders are well aligned and may believe the stock price is too low. So, while it is useful to know what insiders are doing in terms of buying or selling, it is also useful to know the risks that a particular company faces. When we did our research, we found 5 warning signs for Marpai (1 is significant!) which we believe deserve your full attention.

Sure, you might find a fantastic investment by looking elsewhere. So take a look at this free list of interesting companies.

For the purposes of this article, insiders are persons who report their transactions to the relevant regulatory body. We currently record open market transactions and private dispositions, but not derivative transactions.

Valuation is complex, but we help make it simple.

Find out if Marpay is potentially overvalued or undervalued by viewing our full analysis, which includes fair value estimates, risks and warnings, dividends, insider trading and financial health.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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