It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in Flex LNG Ltd. (OB:FLNG).
Do Insider Transactions Matter?
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. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.
Flex LNG Insider Transactions Over The Last Year
The Independent Director Nikolai Grigoriev made the biggest insider purchase in the last 12 months. That single transaction was for kr704k worth of shares at a price of kr42.95 each. We do like to see buying, but this purchase was made at well below the current price of kr72.25. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
Flex LNG insiders may have bought shares in the last year, but they didn't sell any. 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!
Flex LNG is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does Flex LNG Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. From looking at our data, insiders own kr14m worth of Flex LNG stock, about 0.4% of the company. But they may have an indirect interest through a corporate structure that we haven't picked up on. I generally like to see higher levels of ownership.
So What Does This Data Suggest About Flex LNG Insiders?
The fact that there have been no Flex LNG insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. Insiders own shares in Flex LNG and we see no evidence to suggest they are worried about the future. 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. Be aware that Flex LNG is showing 4 warning signs in our investment analysis, and 2 of those are potentially serious...
Of course Flex LNG 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, but not derivative transactions.
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