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Even if it's not a huge purchase, we think it was good to see that Howard Dvorkin, the Chairman of the Board of FlexShopper, Inc. (NASDAQ:FPAY) recently shelled out US$88k to buy stock, at US$2.26 per share. Although the purchase is not a big one, by either a percentage standpoint or absolute value, it can be seen as a good sign.
FlexShopper Insider Transactions Over The Last Year
Notably, that recent purchase by Chairman of the Board Howard Dvorkin was not the only time they bought FlexShopper shares this year. Earlier in the year, they paid US$2.57 per share in a US$366k purchase. That means that an insider was happy to buy shares at above the current price of US$2.31. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
While FlexShopper insiders bought shares during the last year, they didn't sell. They paid about US$2.24 on average. 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 a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Does FlexShopper 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. Insiders own 30% of FlexShopper shares, worth about US$15m. 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 Do The FlexShopper Insider Transactions Indicate?
The recent insider purchases are heartening. 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. Given that insiders also own a fair bit of FlexShopper we think they are probably pretty confident of a bright future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 3 warning signs for FlexShopper you should be aware of, and 1 of them is a bit unpleasant.
But note: FlexShopper 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.
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.
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