Despite Recent Gains, Firebrick Pharma Insiders Are Still Down AU$99k

Insiders who purchased AU$159.0k worth of Firebrick Pharma Limited (ASX:FRE) shares over the past year recouped some of their losses after price gained 14% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled AU$99k since the time of purchase.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Firebrick Pharma

The Last 12 Months Of Insider Transactions At Firebrick Pharma

Over the last year, we can see that the biggest insider purchase was by Founder Peter Molloy for AU$80k worth of shares, at about AU$0.15 per share. That means that an insider was happy to buy shares at above the current price of AU$0.057. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

In the last twelve months Firebrick Pharma insiders were buying shares, but not selling. 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 growing companies that insiders are buying.

Insider Ownership Of Firebrick Pharma

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. It's great to see that Firebrick Pharma insiders own 41% of the company, worth about AU$4.2m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Firebrick Pharma Tell Us?

The fact that there have been no Firebrick Pharma insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. With high insider ownership and encouraging transactions, it seems like Firebrick Pharma insiders think the business has merit. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Firebrick Pharma. At Simply Wall St, we've found that Firebrick Pharma has 5 warning signs (3 are a bit unpleasant!) that deserve your attention before going any further with your analysis.

But note: Firebrick Pharma 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 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.