Did Fiji Kava Limited (ASX:FIJ) Insiders Buy Up More Shares?

It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Fiji Kava Limited (ASX:FIJ).

Do Insider Transactions Matter?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. 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'.

See our latest analysis for Fiji Kava

The Last 12 Months Of Insider Transactions At Fiji Kava

In the last twelve months, the biggest single purchase by an insider was when Founder & Independent Non-Executive Director Zane Yoshida bought AU$75k worth of shares at a price of AU$0.10 per share. That implies that an insider found the current price of AU$0.11 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. The good news for Fiji Kava share holders is that insiders were buying at near the current price.

Fiji Kava insiders may have bought shares in the last year, but they didn't sell any. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Fiji Kava 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.

Insiders at Fiji Kava Have Bought Stock Recently

Over the last quarter, Fiji Kava insiders have spent a meaningful amount on shares. We can see that Founder & Independent Non-Executive Director Zane Yoshida paid AU$75k for shares in the company. No-one sold. This could be interpreted as suggesting a positive outlook.

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. I reckon it's a good sign if insiders own a significant number of shares in the company. Fiji Kava insiders own about AU$3.5m worth of shares. That equates to 27% 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 Do The Fiji Kava Insider Transactions Indicate?

The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest Fiji Kava insiders are well aligned, and that they may think the share price is too low. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For example, Fiji Kava has 5 warning signs (and 3 which are a bit concerning) we think you should know about.

But note: Fiji Kava 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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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. 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.
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