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Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Farmer Bros. Co. (NASDAQ:FARM), it sends a favourable message to the company's shareholders.
While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.
View our latest analysis for Farmer Bros
Farmer Bros Insider Transactions Over The Last Year
The Independent Director Bradley Radoff made the biggest insider purchase in the last 12 months. That single transaction was for US$206k worth of shares at a price of US$2.58 each. So it's clear an insider wanted to buy, at around the current price, which is US$2.77. Of course they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. Happily, the Farmer Bros insiders decided to buy shares at close to current prices.
Farmer Bros insiders may have bought shares in the last year, but they didn't sell any. 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!
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.
Does Farmer Bros Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Our data indicates that Farmer Bros insiders own about US$3.3m worth of shares (which is 5.4% of the company). Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
What Might The Insider Transactions At Farmer Bros Tell Us?
The fact that there have been no Farmer Bros insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. We'd like to see bigger individual holdings. However, we don't see anything to make us think Farmer Bros insiders are doubting the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Farmer Bros. For example, Farmer Bros has 5 warning signs (and 2 which are concerning) we think you should know about.