Insiders At Finning International Sold CA$2.5m In Stock, Alluding To Potential Weakness

The fact that multiple Finning International Inc. (TSE:FTT) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, if numerous insiders are selling, shareholders should investigate more.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Finning International

The Last 12 Months Of Insider Transactions At Finning International

Over the last year, we can see that the biggest insider sale was by the Independent Director, Harold Kvisle, for CA$1.7m worth of shares, at about CA$43.19 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (CA$38.09). So it is hard to draw any strong conclusion from it. Notably Harold Kvisle was also the biggest buyer, having purchased CA$2.2m worth of shares.

In the last twelve months insiders purchased 51.98k shares for CA$2.2m. But insiders sold 60.00k shares worth CA$2.5m. Over the last year we saw more insider selling of Finning International shares, than buying. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like Finning International better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Does Finning International 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. 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 Finning International insiders own 0.2% of the company, worth about CA$10m. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

What Might The Insider Transactions At Finning International Tell Us?

The fact that there have been no Finning International insider transactions recently certainly doesn't bother us. Our analysis of Finning International insider transactions leaves us cautious. The modest level of insider ownership is, at least, some comfort. 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. While conducting our analysis, we found that Finning International has 1 warning sign and it would be unwise to ignore it.

But note: Finning International 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.