Insider Spends AU$3.3m Buying More Shares In Forrestania Resources
Forrestania Resources Limited (ASX:FRS) shareholders (or potential shareholders) will be happy to see that the Executive Chairman, David Geraghty, recently bought a whopping AU$3.3m worth of stock, at a price of AU$0.36. Not only is that a big swing, but it increased their holding size by 16%, which is definitely great to see.
Forrestania Resources Insider Transactions Over The Last Year
In fact, the recent purchase by David Geraghty was the biggest purchase of Forrestania Resources shares made by an insider individual in the last twelve months, according to our records. That means that an insider was happy to buy shares at around the current price of AU$0.40. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. 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. The good news for Forrestania Resources share holders is that insiders were buying at near the current price.
Over the last year, we can see that insiders have bought 17.24m shares worth AU$4.1m. On the other hand they divested 15.00m shares, for AU$2.6m. Overall, Forrestania Resources insiders were net buyers during the last year. Their average price was about AU$0.24. It is certainly positive to see that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. 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!
View our latest analysis for Forrestania Resources
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 Forrestania Resources Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Forrestania Resources insiders own 38% of the company, worth about AU$200m. 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 Forrestania Resources Insiders?
It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Forrestania Resources. That's what I like to see! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Forrestania Resources. For instance, we've identified 2 warning signs for Forrestania Resources (1 shouldn't be ignored) you should be aware of.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.
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