Possible Bearish Signals With Finning International Insiders Disposing Stock

Over the past year, many Finning International Inc. (TSE:FTT) insiders sold a significant stake in the company which may have piqued investors' interest. 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, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Our free stock report includes 1 warning sign investors should be aware of before investing in Finning International. Read for free now.

The Last 12 Months Of Insider Transactions At Finning International

The Independent Director, Harold Kvisle, made the biggest insider sale in the last 12 months. That single transaction was for CA$1.7m worth of shares at a price of CA$43.19 each. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is CA$37.92. So it is hard to draw any strong conclusion from it. Notably Harold Kvisle was also the biggest buyer, having purchased CA$2.0m worth of shares.

Over the last year, we can see that insiders have bought 48.43k shares worth CA$2.0m. But they sold 55.50k shares for CA$2.4m. All up, insiders sold more shares in Finning International than they bought, over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

See our latest analysis for Finning International

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.

Insiders At Finning International Have Sold Stock Recently

The last quarter saw substantial insider selling of Finning International shares. In total, insiders sold CA$237k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

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. Insiders own 0.2% of Finning International shares, worth about CA$13m, according to our data. We do generally prefer see higher levels of insider ownership.

So What Does This Data Suggest About Finning International Insiders?

Insiders sold Finning International shares recently, but they didn't buy any. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But since Finning International is profitable and growing, we're not too worried by this. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We're in no rush to buy! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. In terms of investment risks, we've identified 1 warning sign with Finning International and understanding this should be part of your investment process.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.