Yahoo Finance How Much Are Frontier Resources Limited (ASX:FNT) Insiders Taking Off The Table?
We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Frontier Resources Limited (ASX:FNT), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'
See our latest analysis for Frontier Resources
The Last 12 Months Of Insider Transactions At Frontier Resources
The insider, Fei Peng, made the biggest insider sale in the last 12 months. That single transaction was for AU$3.6m worth of shares at a price of AU$0.012 each. So it's clear an insider wanted to take some cash off the table, even below the current price of AU$0.013. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was 92.7% of Fei Peng's holding. The only individual insider seller over the last year was Fei Peng.
You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
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. Insiders own 11% of Frontier Resources shares, worth about AU$666k, according to our data. But they may have an indirect interest through a corporate structure that we haven't picked up on. We do generally prefer see higher levels of insider ownership.
So What Does This Data Suggest About Frontier Resources Insiders?
An insider sold stock recently, but they haven't been buying. And even if we look to the last year, we didn't see any purchases. Insiders own relatively few shares in the company, and when you consider the sales, we're not particularly excited about the stock. As the saying goes, only fools rush in. Along with insider transactions, I recommend checking if Frontier Resources is growing revenue. This free chart of historic revenue and earnings should make that easy.
But note: Frontier Resources 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.