Insiders Of Frugl Group Are Up 65% On Their AU$1.31m Purchase

Insiders who bought Frugl Group Limited (ASX:FGL) stock in the last 12 months were richly rewarded last week. The company's market value increased by AU$1.2m as a result of the stock's 14% gain over the same period. In other words, the original AU$1.31m purchase is now worth AU$2.15m.

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.

Check out our latest analysis for Frugl Group

Frugl Group Insider Transactions Over The Last Year

The MD & CEO Tat Woo Bng made the biggest insider purchase in the last 12 months. That single transaction was for AU$488k worth of shares at a price of AU$0.004 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.008. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Happily, we note that in the last year insiders paid AU$1.3m for 269.35m shares. But insiders sold 24.03m shares worth AU$204k. In the last twelve months there was more buying than selling by Frugl Group insiders. The average buy price was around AU$0.0048. We don't deny that it is nice to see insiders buying stock in the company. But we must note that the investments were made at well below today's share price. 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!

Frugl Group 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 Frugl Group Have Bought Stock Recently

At Frugl Group,over the last quarter, we have observed quite a lot more insider buying than insider selling. In total, insider John Poynton bought AU$431k worth of shares in that time. On the other hand, insider Shia Lew Li netted AU$204k by selling. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.

Does Frugl Group Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Frugl Group insiders own 46% of the company, worth about AU$3.7m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Frugl Group Insider Transactions Indicate?

It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Frugl Group. Nice! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 4 warning signs with Frugl Group and understanding these should be part of your investment process.

Of course Frugl Group 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.