Insiders Re-Evaluate Their AU$11.6m Stock Purchase As Findi Falls To AU$96m

The recent 17% drop in Findi Limited's (ASX:FND) stock could come as a blow to insiders who purchased AU$11.6m worth of stock at an average buy price of AU$11.07 over the past 12 months. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth AU$1.63m, which is not what they expected.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

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Findi Insider Transactions Over The Last Year

The insider Jack Yetiv made the biggest insider purchase in the last 12 months. That single transaction was for AU$11m worth of shares at a price of AU$7.72 each. That means that an insider was happy to buy shares at above the current price of AU$1.56. 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. In our view, the price an insider pays for shares is very important. 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 purchased 1.05m shares for AU$12m. But insiders sold 513.75k shares worth AU$692k. In total, Findi insiders bought more than they sold over the last year. Their average price was about AU$11.07. I'd consider this a positive as it suggests insiders see value at around the current price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

View our latest analysis for Findi

Findi 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.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. It appears that Findi insiders own 34% of the company, worth about AU$32m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Findi Insiders?

It doesn't really mean much that no insider has traded Findi shares in the last quarter. However, our analysis of transactions over the last year is heartening. Insiders own shares in Findi and we see no evidence to suggest they are worried about the 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 3 warning signs that you should run your eye over to get a better picture of Findi.

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 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.