Filtronic Insiders Benefitted From Selling Stock At UK£0.28

Even though Filtronic plc (LON:FTC) stock gained 13% last week, insiders who sold UK£83k worth of stock over the past year are probably better off. Selling at an average price of UK£0.28, which is higher than the current price might have been the right call as holding on to stock would have meant their investment would be worth less now than it was at the time of sale.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Filtronic

Filtronic Insider Transactions Over The Last Year

The Executive Officer, Richard Gibbs, made the biggest insider sale in the last 12 months. That single transaction was for UK£60k worth of shares at a price of UK£0.28 each. That means that an insider was selling shares at slightly below the current price (UK£0.62). 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 17% of Richard Gibbs's holding.

Happily, we note that in the last year insiders paid UK£16k for 81.78k shares. But insiders sold 289.73k shares worth UK£83k. In total, Filtronic insiders sold more than they bought over the last year. The sellers received a price of around UK£0.28, on average. We don't gain confidence from insider selling below the recent share price. Of course, the sales could be motivated for a multitude of reasons, so we shouldn't jump to conclusions. 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!

I will like Filtronic 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.

Insider Ownership Of Filtronic

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. A high insider ownership often makes company leadership more mindful of shareholder interests. Filtronic insiders own about UK£40m worth of shares. That equates to 30% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Filtronic Tell Us?

Insider buying and selling have balanced each other out in the last three months, so we can't deduct anything useful from these recent trades. We're a little cautious about the insider selling at Filtronic. The modest level of insider ownership is, at least, some comfort. While we like knowing 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. You'd be interested to know, that we found 1 warning sign for Filtronic and we suggest you have a look.

Of course Filtronic may not be the best stock to buy. So you may wish to see this free collection of high quality 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.