Fusion Finance Up 15%, But Some Insiders Miss Out

Despite the fact that Fusion Finance Limited (NSE:FUSION) stock rose 15% last week, insiders who sold ₹15m worth of stock in the previous 12 months are likely to be better off. Holding on to stock would have meant their investment would be worth less now than it was at the time of sale. Thus selling at an average price of ₹466, which is higher than the current price, may have been the best decision.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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The Last 12 Months Of Insider Transactions At Fusion Finance

The CBO - MFI, Ankush Ahluwalia, made the biggest insider sale in the last 12 months. That single transaction was for ₹7.4m worth of shares at a price of ₹502 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (₹155). So it may not shed much light on insider confidence at current levels.

Happily, we note that in the last year insiders paid ₹575k for 3.80k shares. But insiders sold 31.30k shares worth ₹15m. In total, Fusion Finance insiders sold more than they bought over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

See our latest analysis for Fusion Finance

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Have Fusion Finance Insiders Traded Recently?

In the last quarter we saw insiders spend ₹575k on shares. But that was only a smidgen more than the ₹303k worth of sales. Looking at the net result, we don't think these recent trades shed much light on how insiders, as a group, are feeling about the company's prospects.

Insider Ownership Of Fusion Finance

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Fusion Finance insiders own about ₹902m worth of shares. That equates to 5.8% 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.

So What Do The Fusion Finance Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. However, the longer term transactions are not so encouraging. The high levels of insider ownership, and the recent buying by some insiders suggests they are well aligned and optimistic. 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. Case in point: We've spotted 3 warning signs for Fusion Finance you should be aware of, and 2 of these are significant.

But note: Fusion Finance 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.

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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.