Don't Ignore The Insider Selling In Frontier Developments

Some Frontier Developments plc (LON:FDEV) shareholders may be a little concerned to see that the Founder, David Braben, recently sold a substantial UK£7.0m worth of stock at a price of UK£351 per share. However, that sale only accounted for 0.2% of their holding, so arguably it doesn't say much about their conviction.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

The Last 12 Months Of Insider Transactions At Frontier Developments

In fact, the recent sale by David Braben was the biggest sale of Frontier Developments shares made by an insider individual in the last twelve months, according to our records. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of UK£3.51. So it may not tell us anything about how insiders feel about the current share price.

David Braben ditched 994.57k shares over the year. The average price per share was UK£10.91. 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!

Check out our latest analysis for Frontier Developments

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Insider Ownership Of Frontier Developments

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Frontier Developments insiders own 34% of the company, worth about UK£43m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Frontier Developments Insiders?

An insider hasn't bought Frontier Developments stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. On the plus side, Frontier Developments makes money, and is growing profits. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! 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. To that end, you should learn about the 3 warning signs we've spotted with Frontier Developments (including 1 which is a bit concerning).

But note: Frontier Developments 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.

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

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.