Insiders who bought into Fram Skandinavien AB (STO:FRAM B) earlier this year might wish they'd invested more as stock gained 12%

By
Simply Wall St
Published
March 22, 2022
OM:FRAM B
Source: Shutterstock

Fram Skandinavien AB (STO:FRAM B) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 12%, resulting in a kr15m rise in the company's market capitalisation. In other words, the original kr1.6m purchase is now worth kr1.7m.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Fram Skandinavien

The Last 12 Months Of Insider Transactions At Fram Skandinavien

The Chief Executive Officer of Carmudi Vietnam Anh Vu made the biggest insider purchase in the last 12 months. That single transaction was for kr672k worth of shares at a price of kr35.51 each. That implies that an insider found the current price of kr37.00 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. Happily, the Fram Skandinavien insiders decided to buy shares at close to current prices.

While Fram Skandinavien insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
OM:FRAM B Insider Trading Volume March 22nd 2022

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership of Fram Skandinavien

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. Fram Skandinavien insiders own 53% of the company, currently worth about kr71m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Fram Skandinavien Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. With high insider ownership and encouraging transactions, it seems like Fram Skandinavien insiders think the business has merit. 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. To help with this, we've discovered 5 warning signs (1 is a bit unpleasant!) that you ought to be aware of before buying any shares in Fram Skandinavien.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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, but not derivative transactions.

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