Have Insiders Been Selling Fire & Flower Holdings Corp. (TSE:FAF) Shares?

It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Fire & Flower Holdings Corp. (TSE:FAF), you may well want to know whether insiders have been buying or selling.

What Is Insider Buying?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.

Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

See our latest analysis for Fire & Flower Holdings

The Last 12 Months Of Insider Transactions At Fire & Flower Holdings

The Lead Independent Director, Donald Wright, made the biggest insider sale in the last 12 months. That single transaction was for CA$230k worth of shares at a price of CA$0.91 each. That means that even when the share price was below the current price of CA$1.35, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 20% of Donald Wright's holding. Donald Wright was the only individual insider to sell shares in the last twelve months.

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!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insiders at Fire & Flower Holdings Have Sold Stock Recently

Over the last three months, we've seen notably more insider selling, than insider buying, at Fire & Flower Holdings. In that time, Lead Independent Director Donald Wright dumped CA$230k worth of shares. On the flip side, CFO & Executive VP of Operations Nadia Vattovaz spent CA$42k on purchasing shares (as mentioned above) . The share price has moved a bit recently, but it's hard to argue that the selling is a positive.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. It appears that Fire & Flower Holdings insiders own 12% of the company, worth about CA$39m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Fire & Flower Holdings Tell Us?

Unfortunately, there has been more insider selling of Fire & Flower Holdings stock, than buying, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Fire & Flower Holdings. For example, Fire & Flower Holdings has 3 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.

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, but not derivative transactions.

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This article by Simply Wall St is general in nature. 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.
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