Bullish Fluence Insiders Rewarded As Their Investment Rises To US$1.79m

Last week, Fluence Corporation Limited (ASX:FLC) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 14% last week, resulting in a AU$8.7m increase in the company's market worth, implying a 40% gain on their initial purchase. As a result, their original purchase of US$1.28m worth of stock is now worth US$1.79m.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

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Fluence Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Non- Executive Director Nikolaus Egon Oldendorff bought AU$350k worth of shares at a price of AU$0.035 per share. We do like to see buying, but this purchase was made at well below the current price of AU$0.065. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

While Fluence insiders bought shares during the last year, they didn't sell. They paid about AU$0.046 on average. We don't deny that it is nice to see insiders buying stock 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 the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

See our latest analysis for Fluence

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insiders At Fluence Have Bought Stock Recently

It's good to see that Fluence insiders have made notable investments in the company's shares. Non- Executive Director Nikolaus Egon Oldendorff spent AU$350k on stock, and there wasn't any selling. That shows some optimism about the company's future.

Insider Ownership Of Fluence

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Fluence insiders own about AU$24m worth of shares. That equates to 34% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Fluence Insiders?

It's certainly positive to see the recent insider purchase. 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. Insiders likely see value in Fluence shares, given these transactions (along with notable insider ownership of 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. For example, Fluence has 3 warning signs (and 1 which is significant) we think you should know about.

But note: Fluence 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.