Pleasing Signs As A Number Of Insiders Buy Forrestania Resources Stock

When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Forrestania Resources Limited's (ASX:FRS) instance, it's good news for shareholders.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Forrestania Resources

The Last 12 Months Of Insider Transactions At Forrestania Resources

In fact, the recent purchase by Adam Turnbull was the biggest purchase of Forrestania Resources shares made by an insider individual in the last twelve months, according to our records. That means that an insider was happy to buy shares at above the current price of AU$0.023. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

While Forrestania Resources insiders bought shares during the last year, they didn't sell. They paid about AU$0.023 on average. These transactions show that insiders have confidence to invest their own money in the stock, albeit at slightly below the recent 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!

Forrestania Resources is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insiders At Forrestania Resources Have Bought Stock Recently

Over the last quarter, Forrestania Resources insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought AU$550k worth of shares. This is a positive in our book as it implies some confidence.

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. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 35% of Forrestania Resources shares, worth about AU$1.9m. 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 Forrestania Resources Insider Transactions Indicate?

It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Insiders likely see value in Forrestania Resources shares, given these transactions (along with notable insider ownership of the company). 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 4 warning signs for Forrestania Resources you should be aware of.

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.