Multiple insiders secured a larger position in Farm Pride Foods Limited (ASX:FRM) shares over the last 12 months. This is reassuring as this suggests that insiders have increased optimism about the company's prospects.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
See our latest analysis for Farm Pride Foods
The Last 12 Months Of Insider Transactions At Farm Pride Foods
In the last twelve months, the biggest single purchase by an insider was when MD & Director Darren Lurie bought AU$800k worth of shares at a price of AU$0.055 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.15. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
While Farm Pride Foods insiders bought shares during the last year, they didn't sell. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
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. I reckon it's a good sign if insiders own a significant number of shares in the company. Farm Pride Foods insiders own about AU$10m worth of shares (which is 48% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About Farm Pride Foods Insiders?
The fact that there have been no Farm Pride Foods insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. It would be great to see more insider buying, but overall it seems like Farm Pride Foods insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To help with this, we've discovered 4 warning signs (3 are concerning!) that you ought to be aware of before buying any shares in Farm Pride Foods.