Even if it's not a huge purchase, we think it was good to see that John Good, the Independent Director of Farmland Partners Inc. (NYSE:FPI) recently shelled out US$80k to buy stock, at US$8.03 per share. Even though that isn't a massive buy, it did increase their holding by 55%, which is arguably a good sign.
Farmland Partners Insider Transactions Over The Last Year
In fact, the recent purchase by John Good was the biggest purchase of Farmland Partners shares made by an insider individual in the last twelve months, according to our records. That means that an insider was happy to buy shares at around the current price of US$8.24. Of course they may have changed their mind. But this suggests they are optimistic. 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. The good news for Farmland Partners share holders is that insiders were buying at near the current price.
In the last twelve months Farmland Partners insiders were buying shares, but not selling. Their average price was about US$7.01. It's great to see insiders putting their own cash into the company's stock, albeit at below the recent share 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!
Farmland Partners is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with 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. Farmland Partners insiders own about US$25m worth of shares. That equates to 10% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At Farmland Partners Tell Us?
The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Given that insiders also own a fair bit of Farmland Partners we think they are probably pretty confident of a bright future. 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. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of Farmland Partners.
But note: Farmland Partners 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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