Yahoo Finance Great news for Fortescue Metals Group Limited (ASX:FMG): Insiders acquired stock in large numbers last year
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 Fortescue Metals Group Limited (ASX:FMG), it sends a favourable message to the company's shareholders.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Check out our latest analysis for Fortescue Metals Group
The Last 12 Months Of Insider Transactions At Fortescue Metals Group
Over the last year, we can see that the biggest insider purchase was by Non Executive Director Sebastian Coe for AU$99k worth of shares, at about AU$19.72 per share. So it's clear an insider wanted to buy, at around the current price, which is AU$20.41. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. In this case we're pleased to report that the insider purchases were made at close to current prices.
In the last twelve months Fortescue Metals Group insiders were buying shares, but not selling. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
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.
Fortescue Metals Group Insiders Bought Stock Recently
It's good to see that Fortescue Metals Group insiders have made notable investments in the company's shares. In total, insiders bought AU$121k worth of shares in that time, and we didn't record any sales whatsoever. This is a positive in our book as it implies some confidence.
Insider Ownership
Many investors like to check how much of a company is owned by 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. Fortescue Metals Group insiders own 0.4% of the company, currently worth about AU$236m based on the recent share price. 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 Fortescue Metals Group Insiders?
It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Fortescue Metals Group. That's what I like to see! 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 2 warning signs (1 is significant!) that you ought to be aware of before buying any shares in Fortescue Metals Group.
Of course Fortescue Metals Group may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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, but not derivative transactions.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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