It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we’ll take a look at whether insiders have been buying or selling shares in Fission Uranium Corp. (TSE:FCU).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.
Fission Uranium Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Chairman & CEO Devinder Randhawa bought CA$123k worth of shares at a price of CA$0.76 per share. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being CA$0.14). 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. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
Fission Uranium insiders may have bought shares in the last year, but they didn’t sell any. They paid about CA$0.39 on average. I’d consider this a positive as it suggests insiders see value at around the current price. 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!
Fission Uranium is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Does Fission Uranium 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. Our data suggests Fission Uranium insiders own 1.9% of the company, worth about CA$1.3m. But they may have an indirect interest through a corporate structure that we haven’t picked up on. We consider this fairly low insider ownership.
What Might The Insider Transactions At Fission Uranium Tell Us?
It doesn’t really mean much that no insider has traded Fission Uranium shares in the last quarter. However, our analysis of transactions over the last year is heartening. The transactions are fine but it’d be more encouraging if Fission Uranium insiders bought more shares in the company. In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing Fission Uranium. At Simply Wall St, we’ve found that Fission Uranium has 4 warning signs (1 shouldn’t be ignored!) that deserve your attention before going any further with your analysis.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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, but not derivative transactions.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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