Insiders who purchased US$7.63m worth of MGM Resorts International (NYSE:MGM) shares over the past year recouped some of their losses after price gained 12% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled US$989k since the time of purchase.

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.

We've discovered 2 warning signs about MGM Resorts International. View them for free.

The Last 12 Months Of Insider Transactions At MGM Resorts International

The Independent Chairman Paul Salem made the biggest insider purchase in the last 12 months. That single transaction was for US$5.0m worth of shares at a price of US$33.80 each. That means that an insider was happy to buy shares at above the current price of US$29.35. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

In the last twelve months insiders purchased 226.40k shares for US$7.6m. On the other hand they divested 19.03k shares, for US$764k. In total, MGM Resorts International insiders bought more than they sold over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Check out our latest analysis for MGM Resorts International

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Insiders At MGM Resorts International Have Bought Stock Recently

Over the last three months, we've seen significantly more insider buying, than insider selling, at MGM Resorts International. We can see that CFO & Treasurer Jonathan Halkyard paid US$322k for shares in the company. On the other hand, Senior VP & Chief Accounting Officer Todd Meinert netted US$227k by selling. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 1.0% of MGM Resorts International shares, worth about US$87m. 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 MGM Resorts International Insider Transactions Indicate?

It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. Given that insiders also own a fair bit of MGM Resorts International we think they are probably pretty confident of a bright future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of MGM Resorts International.

Of course MGM Resorts International 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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.