Insider Buyers Lose UK£43k As Finseta Sheds UK£704k
Insiders who acquired UK£105.2k worth of Finseta Plc's (LON:FIN) stock at an average price of UK£0.11 in the past 12 months may be dismayed by the recent 14% price decline. 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 UK£61.9k, which is not great.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At Finseta
The Chief Information Officer & Executive Director, William Timothy Newton, made the biggest insider sale in the last 12 months. That single transaction was for UK£41k worth of shares at a price of UK£0.093 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is UK£0.063. So it may not shed much light on insider confidence at current levels. Notably William Timothy Newton was also the biggest buyer, having purchased UK£105k worth of shares.
Over the last year, we can see that insiders have bought 990.76k shares worth UK£105k. But insiders sold 870.42k shares worth UK£85k. In total, Finseta insiders bought more than they sold over the last year. The average buy price was around UK£0.11. This is nice to see since it implies that insiders might see value around current prices. 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!
Check out our latest analysis for Finseta
Finseta is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
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. We usually like to see fairly high levels of insider ownership. It's great to see that Finseta insiders own 44% of the company, worth about UK£1.9m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Finseta Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Finseta shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Judging from their transactions, and high insider ownership, Finseta insiders feel good about the company's 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. To that end, you should learn about the 3 warning signs we've spotted with Finseta (including 2 which don't sit too well with us).
But note: Finseta 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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