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Multiple insiders secured a larger position in Fortis Inc. (TSE:FTS) shares over the last 12 months. This is reassuring as this suggests that insiders have increased optimism about the company's prospects.
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.
Check out our latest analysis for Fortis
The Last 12 Months Of Insider Transactions At Fortis
Over the last year, we can see that the biggest insider sale was by the insider, James Laurito, for CA$1.4m worth of shares, at about CA$61.17 per share. So what is clear is that an insider saw fit to sell at around the current price of CA$60.69. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).
Over the last year, we can see that insiders have bought 36.99k shares worth CA$2.0m. On the other hand they divested 24.99k shares, for CA$1.5m. In the last twelve months there was more buying than selling by Fortis insiders. 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!
Fortis is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders At Fortis Have Sold Stock Recently
We've seen more insider selling than insider buying at Fortis recently. In total, insider James Laurito sold CA$1.4m worth of shares in that time. On the flip side, insiders spent CA$110k on purchasing shares. Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the shares are not cheap.
Does Fortis 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. We usually like to see fairly high levels of insider ownership. Fortis insiders own about CA$31m worth of shares. That equates to 0.1% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About Fortis Insiders?
The insider sales have outweighed the insider buying, at Fortis, in the last three months. In contrast, they appear keener if you look at the last twelve months. We like that insiders own a fair amount of the company. So we're happy enough to look past some selling. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that Fortis is showing 3 warning signs in our investment analysis, and 1 of those is concerning...