Whilst it may not be a huge deal, we thought it was good to see that the Francesca’s Holdings Corporation (NASDAQ:FRAN) Director, Richard Emmett, recently bought US$57k worth of stock, for US$11.43 per share. While we’re hesitant to get too excited about a purchase of that size, we do note it increased their holding by a solid 23.4%.
The Last 12 Months Of Insider Transactions At Francesca’s Holdings
In the last twelve months, the biggest single purchase by an insider was when Director Martyn Redgrave bought US$59k worth of shares at a price of US$47.16 per share. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being US$18.14). 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. To us, it’s very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
In the last twelve months insiders paid US$116k for 6250 shares purchased. While Francesca’s Holdings insiders bought shares last year, they didn’t sell. Their average price was about US$18.58. This is nice to see since it implies that insiders might see value around current prices. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Does Francesca’s Holdings Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. From looking at our data, insiders own US$2.0m worth of Francesca’s Holdings stock, about 3.5% of the company. We consider this fairly low insider ownership.
So What Does This Data Suggest About Francesca’s Holdings Insiders?
It’s certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn’t make a profit over the last twelve months, which makes us cautious. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Francesca’s Holdings insiders are expecting a bright future. I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow for free .
But note: Francesca’s Holdings 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, but not derivative transactions.
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