Investors who take an interest in Fitzroy River Corporation Limited (ASX:FZR) should definitely note that the Independent Non-Executive Director, Susan Thomas, recently paid AU$0.12 per share to buy AU$359k worth of the stock. That's a very decent purchase to our minds and it grew their holding by a solid 13%.
The Last 12 Months Of Insider Transactions At Fitzroy River
Notably, that recent purchase by Susan Thomas is the biggest insider purchase of Fitzroy River shares that we've seen in the last year. That means that an insider was happy to buy shares at around the current price of AU$0.13. Of course they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. The good news for Fitzroy River share holders is that insiders were buying at near the current price.
In the last twelve months Fitzroy River insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Does Fitzroy River 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Fitzroy River insiders own about AU$4.5m worth of shares. That equates to 32% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Fitzroy River Insiders?
It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Fitzroy River insiders are well aligned, and that they may think the share price is too low. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Case in point: We've spotted 6 warning signs for Fitzroy River you should be aware of, and 4 of these are concerning.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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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