Possible Bearish Signals With Finning International Insiders Disposing Stock

Many Finning International Inc. (TSE:FTT) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

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

Check out our latest analysis for Finning International

Finning International Insider Transactions Over The Last Year

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. The good news is that this large sale was at well above current price of CA$38.04. So it is hard to draw any strong conclusion from it. Notably Harold Kvisle was also the biggest buyer, having purchased CA$2.3m worth of shares.

Over the last year, we can see that insiders have bought 55.75k shares worth CA$2.3m. On the other hand they divested 72.83k shares, for CA$3.0m. Over the last year we saw more insider selling of Finning International shares, than buying. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. 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.

Finning International Insiders Are Selling The Stock

We've seen more insider selling than insider buying at Finning International recently. We note Independent Director Harold Kvisle cashed in CA$2.1m worth of shares. On the other hand we note Independent Director Harold Kvisle bought CA$1.9m worth of shares. Because the selling vastly outweighs the buying, we'd say this is a somewhat bearish sign.

Insider Ownership Of Finning International

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our data indicates that Finning International insiders own about CA$13m worth of shares (which is 0.2% of the company). Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Does This Data Suggest About Finning International Insiders?

The insider sales have outweighed the insider buying, at Finning International, in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! 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. When we did our research, we found 3 warning signs for Finning International (1 is a bit concerning!) that we believe deserve your full attention.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com