When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in FAR Limited's( ASX:FAR ) instance, it's good news for shareholders.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At FAR
In fact, the recent purchase by Jennifer Pryor was the biggest purchase of FAR shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.43). Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
FAR insiders may have bought shares in the last year, but they didn't sell any. 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!
View our latest analysis for FAR
FAR 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.
FAR Insiders Bought Stock Recently
It's good to see that FAR insiders have made notable investments in the company's shares. Not only was there no selling that we can see, but they collectively bought AU$874k worth of shares. This is a positive in our book as it implies some confidence.
Does FAR Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. From our data, it seems that FAR insiders own 13% of the company, worth about AU$5.4m. But they may have an indirect interest through a corporate structure that we haven't picked up on. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
So What Do The FAR Insider Transactions Indicate?
It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that FAR insiders are reasonably well aligned, and optimistic for the future. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Every company has risks, and we've spotted 3 warning signs for FAR (of which 1 doesn't sit too well with us!) you should know about.
But note: FAR may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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.
