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Whilst it may not be a huge deal, we thought it was good to see that the Flexiroam Limited (ASX:FRX) Chief Executive Officer, Stephen Picton, recently bought AU$135k worth of stock, for AU$0.011 per share. That purchase might not be huge but it did increase their holding by 13%.
View our latest analysis for Flexiroam
Flexiroam Insider Transactions Over The Last Year
Notably, that recent purchase by Chief Executive Officer Stephen Picton was not the only time they bought Flexiroam shares this year. They previously made an even bigger purchase of AU$1m worth of shares at a price of AU$0.023 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.011). Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. 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.
While Flexiroam insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Flexiroam is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Does Flexiroam 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Flexiroam insiders own about AU$5.0m worth of shares (which is 57% of the company). 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 Does This Data Suggest About Flexiroam Insiders?
It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Flexiroam insiders are well aligned, and quite possibly think the share price is too low. Looks promising! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Flexiroam. At Simply Wall St, we've found that Flexiroam has 4 warning signs (3 are potentially serious!) that deserve your attention before going any further with your analysis.