Firetail Resources Loses AU$3.0m Market Value But Insiders See Windfall Of AU$70k

Insiders who purchased Firetail Resources Limited (ASX:FTL) shares in the past 12 months are unlikely to be deeply impacted by the stock's 11% decline over the past week. After accounting for the recent loss, the AU$144.1k worth of shares they purchased is now worth AU$214.1k, suggesting a good return on their investment.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Firetail Resources

The Last 12 Months Of Insider Transactions At Firetail Resources

Over the last year, we can see that the biggest insider purchase was by insider Brett Grosvenor for AU$80k worth of shares, at about AU$0.04 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.07. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

In the last twelve months Firetail Resources insiders were buying shares, but not selling. Their average price was about AU$0.047. It is certainly positive to see that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. 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 undervalued small cap companies that insiders are buying.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From our data, it seems that Firetail Resources insiders own 10% of the company, worth about AU$2.4m. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Whilst better than nothing, we're not overly impressed by these holdings.

So What Do The Firetail Resources Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Firetail Resources shares in the last quarter. However, our analysis of transactions over the last year is heartening. The transactions are fine but it'd be more encouraging if Firetail Resources insiders bought more shares in the company. While it's good to be aware of 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. Case in point: We've spotted 4 warning signs for Firetail Resources you should be aware of, and 2 of them don't sit too well with us.

Of course Firetail Resources 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.