Trade Alert: The President Of FreightCar America, Inc. (NASDAQ:RAIL), James Meyer, Has Just Spent US$59k Buying 15% More Shares

Whilst it may not be a huge deal, we thought it was good to see that the FreightCar America, Inc. (NASDAQ:RAIL) President, James Meyer, recently bought US$59k worth of stock, for US$2.13 per share. While we're hesitant to get too excited about a purchase of that size, we do note it increased their holding by a solid 15%.

View our latest analysis for FreightCar America

The Last 12 Months Of Insider Transactions At FreightCar America

Notably, that recent purchase by James Meyer is the biggest insider purchase of FreightCar America shares that we've seen in the last year. That means that even when the share price was higher than US$2.51 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

While FreightCar America insiders bought shares during the last year, they didn't sell. The average buy price was around US$2.08. Although they bought at below the recent share price, it is good to see that insiders are willing to invest in the company. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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).

Does FreightCar America Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data indicates that FreightCar America insiders own about US$2.9m worth of shares (which is 7.1% of the company). We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. We do generally prefer see higher levels of insider ownership.

What Might The Insider Transactions At FreightCar America Tell Us?

It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on FreightCar America stock. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing FreightCar America. Be aware that FreightCar America is showing 5 warning signs in our investment analysis, and 1 of those doesn't sit too well with us...

But note: FreightCar America 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, but not derivative transactions.

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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. 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.
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