Fortifai Insiders Benefit From Selling Stock At AU$0.20
Although Fortifai Limited (ASX:FTI) shareholders have enjoyed a great week with the stock up 39%, insiders who sold stock over the past year haven't fared as well. Had they waited, they might have been able to sell their stock at much higher prices and thereby received a better value on their investment.
While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.
Fortifai Insider Transactions Over The Last Year
The insider, Duncan Gordon, made the biggest insider sale in the last 12 months. That single transaction was for AU$98k worth of shares at a price of AU$0.20 each. That means that an insider was selling shares at slightly below the current price (AU$0.25). 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. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 50% of Duncan Gordon's holding. Duncan Gordon was the only individual insider to sell shares in the last twelve months.
The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
View our latest analysis for Fortifai
I will like Fortifai better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.
Insider Ownership Of Fortifai
For a common shareholder, it is worth checking how many shares are held by company 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. From our data, it seems that Fortifai insiders own 14% of the company, worth about AU$5.3m. But they may have an indirect interest through a corporate structure that we haven't picked up on. Whilst better than nothing, we're not overly impressed by these holdings.
So What Do The Fortifai Insider Transactions Indicate?
The fact that there have been no Fortifai insider transactions recently certainly doesn't bother us. The insider transactions at Fortifai are not inspiring us to buy. And usually insiders own more stock in the company, according to our data. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To help with this, we've discovered 5 warning signs (2 shouldn't be ignored!) that you ought to be aware of before buying any shares in Fortifai.
But note: Fortifai 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.