Insider Buyers At Farm Pride Foods Sitting On AU$2.7m Profit

Insiders who bought Farm Pride Foods Limited (ASX:FRM) stock lover the last 12 months are probably not as affected by last week’s 11% loss. After taking the recent loss into consideration, the AU$2.19m worth of stock they bought is now worth AU$4.87m, indicating that their investment yielded a positive return.

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

Check out our latest analysis for Farm Pride Foods

Farm Pride Foods Insider Transactions Over The Last Year

The MD & Director Darren Lurie made the biggest insider purchase in the last 12 months. That single transaction was for AU$800k worth of shares at a price of AU$0.055 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.13. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Farm Pride Foods insiders may have bought shares in the last year, but they didn't sell any. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Farm Pride Foods is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insiders At Farm Pride Foods Have Bought Stock Recently

We saw some Farm Pride Foods insider buying shares in the last three months. Non-Executive Chairman George Palatianos shelled out AU$76k for shares in that time. We like it when there are only buyers, and no sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.

Does Farm Pride Foods Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Farm Pride Foods insiders own 48% of the company, currently worth about AU$8.7m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Farm Pride Foods Insiders?

It's certainly positive to see the recent insider purchase. 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 Farm Pride Foods insiders are well aligned, and quite possibly think the share price is too low. That's what I like to see! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Farm Pride Foods. Every company has risks, and we've spotted 4 warning signs for Farm Pride Foods (of which 3 can't be ignored!) you should know about.

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.