Bullish Futura Medical Insiders Loaded Up On UK£707.0k Of Stock
When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Futura Medical plc's (LON:FUM) instance, it's good news for shareholders.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
Futura Medical Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when insider R. McAlpine bought UK£100k worth of shares at a price of UK£0.002 per share. That means that an insider was happy to buy shares at above the current price of UK£0.0018. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
Over the last year, we can see that insiders have bought 353.50m shares worth UK£707k. But insiders sold 5.00m shares worth UK£11k. In total, Futura Medical 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. By clicking on the graph below, you can see the precise details of each insider transaction!
See our latest analysis for Futura Medical
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.
Futura Medical Insiders Bought Stock Recently
At Futura Medical,over the last quarter, we have observed quite a lot more insider buying than insider selling. Insiders spent UK£707k on shares. On the other hand, insider Benjamin Turner netted UK£11k by selling. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.
Does Futura Medical Boast High 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Futura Medical insiders own 35% of the company, worth about UK£949k. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Futura Medical Tell Us?
It is good to see recent purchasing. 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. When combined with notable insider ownership, these factors suggest Futura Medical insiders are well aligned, and that they may think the share price is too low. 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 5 warning signs for Futura Medical you should be aware of, and 4 of these are a bit unpleasant.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.