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We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Fiducian Group Limited (ASX:FID), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
We don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.
See our latest analysis for Fiducian Group
Fiducian Group Insider Transactions Over The Last Year
The Independent Non-Executive Director Samir Hallab made the biggest insider purchase in the last 12 months. That single transaction was for AU$120k worth of shares at a price of AU$6.04 each. Even though the purchase was made at a significantly lower price than the recent price (AU$6.75), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
Samir Hallab bought 46.50k shares over the last 12 months at an average price of AU$5.91. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Fiducian Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Fiducian Group insiders own 44% of the company, currently worth about AU$93m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Fiducian Group Tell Us?
It doesn't really mean much that no insider has traded Fiducian Group shares in the last quarter. However, our analysis of transactions over the last year is heartening. It would be great to see more insider buying, but overall it seems like Fiducian Group insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. In terms of investment risks, we've identified 1 warning sign with Fiducian Group and understanding this should be part of your investment process.