Should You Be Worried About Insider Transactions At Arendals Fossekompani ASA (OB:AFK)?

We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Arendals Fossekompani ASA (OB:AFK), you may well want to know whether insiders have been buying or selling.

What Is Insider Buying?

It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.

View our latest analysis for Arendals Fossekompani

Arendals Fossekompani Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Torkil Mogstad bought øre1.3m worth of shares at a price of øre2,648 per share. That means that an insider was happy to buy shares at around the current price. That means they have been optimistic about the company in the past, though they may have changed their mind. In any event it’s generally a positive if insiders are buying shares at around the current price. Torkil Mogstad was the only individual insider to buy shares in the last twelve months.

Over the last year we saw more insider selling of Arendals Fossekompani shares, than buying. The average sell price was around øre2,126. It’s not particularly great to see insiders were selling shares at below recent prices. 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 individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

OB:AFK Recent Insider Trading, April 4th 2019
OB:AFK Recent Insider Trading, April 4th 2019

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Arendals Fossekompani Insiders Bought Stock Recently

Over the last quarter, Arendals Fossekompani insiders have spent a meaningful amount on shares. Specifically, Torkil Mogstad bought øre1.3m worth of shares in that time, and we didn’t record any sales whatsoever. This makes one think the business has some good points.

Insider Ownership of Arendals Fossekompani

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Insiders own 4.7% of Arendals Fossekompani shares, worth about øre323m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Arendals Fossekompani Insiders?

The recent insider purchase is heartening. On the other hand the transaction history, over the last year, isn’t so positive. The high levels of insider ownership, and the recent buying by an insider, suggests they are well aligned and optimistic. I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow for free .

But note: Arendals Fossekompani 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.