Insider Buyers At Finder Energy Holdings Likely Disappointed With 10% Slide
The recent price decline of 10% in Finder Energy Holdings Limited's (ASX:FDR) stock may have disappointed insiders who bought AU$1.21m worth of shares at an average price of AU$0.39 in the past 12 months. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth AU$968.2k, which is not great.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Finder Energy Holdings Insider Transactions Over The Last Year
The Non-Executive Director Stephen Gardyne made the biggest insider purchase in the last 12 months. That single transaction was for AU$802k worth of shares at a price of AU$0.39 each. That means that even when the share price was higher than AU$0.31 (the recent price), an insider wanted to purchase shares. 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. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
Happily, we note that in the last year insiders paid AU$1.2m for 3.12m shares. But they sold 150.00k shares for AU$64k. In total, Finder Energy Holdings insiders bought more than they sold over the last year. 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!
Check out our latest analysis for Finder Energy Holdings
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.
Finder Energy Holdings Insiders Bought Stock Recently
It's good to see that Finder Energy Holdings insiders have made notable investments in the company's shares. Specifically, Independent Non-Executive Chairman Bronwyn Barnes bought AU$99k worth of shares in that time, and we didn't record any sales whatsoever. That shows some optimism about the company's future.
Insider Ownership Of Finder Energy Holdings
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Insiders own 7.6% of Finder Energy Holdings shares, worth about AU$13m, according to our data. However, it's possible that insiders might have an indirect interest through a more complex structure. We do generally prefer see higher levels of insider ownership.
So What Do The Finder Energy Holdings Insider Transactions Indicate?
The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Finder Energy Holdings insiders are well aligned, and that they may think the share price is too low. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Finder Energy Holdings. For example, Finder Energy Holdings has 3 warning signs (and 2 which can't be ignored) we think you should know about.
But note: Finder Energy Holdings 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.