Fortress Biotech Insiders Placed Bullish Bets Worth US$3.08m

Quite a few insiders have dramatically grown their holdings in Fortress Biotech, Inc. (NASDAQ:FBIO) over the past 12 months. An insider's optimism about the company's prospects is a positive sign.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Fortress Biotech

The Last 12 Months Of Insider Transactions At Fortress Biotech

The Executive Chairman Lindsay Rosenwald made the biggest insider purchase in the last 12 months. That single transaction was for US$2.7m worth of shares at a price of US$1.70 each. That implies that an insider found the current price of US$1.78 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. Happily, the Fortress Biotech insiders decided to buy shares at close to current prices.

Happily, we note that in the last year insiders paid US$3.1m for 1.78m shares. But they sold 10.00k shares for US$19k. Overall, Fortress Biotech insiders were net buyers during the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Fortress Biotech is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Have Fortress Biotech Insiders Traded Recently?

In the last quarter there were insider sales totalling US$19k. That's only a tiny bit more than the purchases, worth US$18k. Looking at the net result, we don't think this recent trading sheds much light on how insiders, as a group, are feeling about the company's prospects.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Fortress Biotech insiders own 23% of the company, worth about US$8.5m. 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 Fortress Biotech Insiders?

Insider sales and purchases have netted out over the last three months, so it's hard to draw any conclusion from recent trading. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in Fortress Biotech and their transactions don't cause us concern. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. When we did our research, we found 7 warning signs for Fortress Biotech (4 are a bit unpleasant!) that we believe deserve your full attention.

But note: Fortress Biotech 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 of direct interests only, but not derivative transactions or indirect interests.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.