We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell FONAR Corporation (NASDAQ:FONR), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
The Last 12 Months Of Insider Transactions At FONAR
In the last twelve months, the biggest single sale by an insider was when the Chairman of the Board, Raymond Damadian, sold US$59k worth of shares at a price of US$24.80 per share. So what is clear is that an insider saw fit to sell at around the current price of US$24.28. While we don’t usually like to see insider selling, it’s more concerning if the sales take place at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern. Raymond Damadian was the only individual insider to sell over the last year.
Raymond Damadian sold a total of 3300 shares over the year at an average price of US$24.55. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
Does FONAR Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Insiders own 5.0% of FONAR shares, worth about US$7.9m, according to our data. Whilst better than nothing, we’re not overly impressed by these holdings.
So What Does This Data Suggest About FONAR Insiders?
It doesn’t really mean much that no insider has traded FONAR shares in the last quarter. The insider transactions at FONAR are not inspiring us to buy. We also note that, as far as we can see, insider ownership is fairly low, compared to other companies. To put this in context, take a look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow .
But note: FONAR 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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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. Thank you for reading.