Forian Inc. (NASDAQ:FORA) drops to US$113m and insiders who purchased earlier this year lose another US$146k

Insiders who bought US$405k worth of Forian Inc.'s (NASDAQ:FORA) stock at an average buy price of US$5.48 over the last year may be disappointed by the recent 12% decrease in the stock. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth US$260k, which is not what they expected.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Forian

Forian Insider Transactions Over The Last Year

The Director Martin Wygod made the biggest insider purchase in the last 12 months. That single transaction was for US$99k worth of shares at a price of US$6.75 each. That means that an insider was happy to buy shares at above the current price of US$3.51. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

While Forian insiders bought shares during the last year, they didn't sell. They paid about US$5.48 on average. I'd consider this a positive as it suggests insiders see value at around the current price. 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!

Forian is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Forian Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at Forian. Not only was there no selling that we can see, but they collectively bought US$60k worth of shares. This could be interpreted as suggesting a positive outlook.

Does Forian Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 40% of Forian shares, worth about US$45m. 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 Does This Data Suggest About Forian Insiders?

It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Insiders likely see value in Forian shares, given these transactions (along with notable insider ownership of the company). 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. Case in point: We've spotted 4 warning signs for Forian you should be aware of, and 1 of these shouldn't be ignored.

Of course Forian 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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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.