Stock Analysis

Insider Buying: First National Financial Co-Founder & Executive Chairman Bought CA$1.3m Of Shares

TSX:FN
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Those following along with First National Financial Corporation (TSE:FN) will no doubt be intrigued by the recent purchase of shares by Stephen J. Smith, Co-Founder & Executive Chairman of the company, who spent a stonking CA$1.3m on stock at an average price of CA$39.82. While that only increased their holding size by 0.1%, it is still a big swing by our standards.

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First National Financial Insider Transactions Over The Last Year

In fact, the recent purchase by Co-Founder & Executive Chairman Stephen J. Smith was not their only acquisition of First National Financial shares this year. They previously made an even bigger purchase of CA$4.5m worth of shares at a price of CA$33.93 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of CA$39.11. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

First National Financial insiders may have bought shares in the last year, but they didn't sell any. 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!

insider-trading-volume
TSX:FN Insider Trading Volume August 17th 2023

First National Financial is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insider Ownership Of First National Financial

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. First National Financial insiders own 38% of the company, currently worth about CA$900m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About First National Financial Insiders?

It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. Once you factor in the high insider ownership, it certainly seems like insiders are positive about First National Financial. Looks promising! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing First National Financial. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of First National Financial.

But note: First National Financial 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, but not derivative transactions.

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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.