Insiders Enjoy US$156k Return After Buying Fortress Biotech Stock

Fortress Biotech, Inc. (NASDAQ:FBIO) insiders who acquired shares over the previous 12 months, can probably afford to ignore the recent 10% decline in the stock price. After taking the recent loss into consideration, the US$1.45m worth of stock they bought is now worth US$1.61m, indicating that their investment yielded a positive return.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

View 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$1.4m worth of shares at a price of US$1.84 each. That means that an insider was happy to buy shares at around the current price of US$2.03. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. Happily, the Fortress Biotech insider decided to buy shares at close to current prices. Lindsay Rosenwald was the only individual insider to buy shares in the last twelve months.

Lindsay Rosenwald bought 793.36k shares over the last 12 months at an average price of US$1.83. 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 insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

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. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Fortress Biotech insiders own 23% of the company, worth about US$13m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Fortress Biotech Insider Transactions Indicate?

The fact that there have been no Fortress Biotech insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. Insiders own shares in Fortress Biotech and we see no evidence to suggest they are worried about the future. While it's good to be aware of 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. For example, Fortress Biotech has 6 warning signs (and 3 which are a bit unpleasant) we think you should know about.

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.

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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.