Foresta Group Holding Insiders Benefit From Selling Stock At AU$0.0044

While it’s been a great week for Foresta Group Holding Limited (ASX:FGH) shareholders after stock gained 13%, they should consider it with a grain of salt. In spite of the relatively cheap prices, insiders made the decision to sell AU$699k worth of stock in the last 12 months. This could be a warning indicator of vulnerabilities in the future.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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The Last 12 Months Of Insider Transactions At Foresta Group Holding

The insider, Ramon Mountfort, made the biggest insider sale in the last 12 months. That single transaction was for AU$699k worth of shares at a price of AU$0.0044 each. That means that an insider was selling shares at slightly below the current price (AU$0.009). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 27% of Ramon Mountfort's stake. The only individual insider seller over the last year was Ramon Mountfort.

Happily, we note that in the last year insiders paid AU$160k for 24.00m shares. But insiders sold 158.05m shares worth AU$699k. 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!

Check out our latest analysis for Foresta Group Holding

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Does Foresta Group Holding Boast High 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Foresta Group Holding insiders own 65% of the company, worth about AU$16m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Foresta Group Holding Tell Us?

The fact that there have been no Foresta Group Holding insider transactions recently certainly doesn't bother us. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Foresta Group Holding insiders selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Foresta Group Holding. To that end, you should learn about the 4 warning signs we've spotted with Foresta Group Holding (including 3 which are a bit concerning).

Of course Foresta Group Holding may not be the best stock to buy. So you may wish to see this free collection of high quality 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.