Non-Executive Director of Flexiroam Stephen Picton Buys 67% More Shares

Investors who take an interest in Flexiroam Limited (ASX:FRX) should definitely note that the Non-Executive Director, Stephen Picton, recently paid AU$0.0082 per share to buy AU$320k worth of the stock. That certainly has us anticipating the best, especially since they thusly increased their own holding by 67%, potentially signalling some real optimism.

View our latest analysis for Flexiroam

The Last 12 Months Of Insider Transactions At Flexiroam

In fact, the recent purchase by Non-Executive Director Stephen Picton was not their only acquisition of Flexiroam shares this year. They previously made an even bigger purchase of AU$1m worth of shares at a price of AU$0.023 per share. That means that an insider was happy to buy shares at above the current price of AU$0.022. 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. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

Flexiroam insiders may have bought shares in the last year, but they didn't sell any. They paid about AU$0.017 on average. To my mind it is good 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. 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!

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

Does Flexiroam 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. We usually like to see fairly high levels of insider ownership. Flexiroam insiders own about AU$9.0m worth of shares (which is 52% of the company). 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 Flexiroam Tell Us?

The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Flexiroam. That's what I like to see! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example, Flexiroam has 4 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.

But note: Flexiroam 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.

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