Over the last year, a good number of insiders have significantly increased their holdings in FirstRand Limited (JSE:FSR). This is encouraging because it indicates that insiders are more optimistic about the company’s prospects.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
View our latest analysis for FirstRand
The Last 12 Months Of Insider Transactions At FirstRand
The Chief Executive Officer of RMB Emmarentia Brown made the biggest insider purchase in the last 12 months. That single transaction was for R157m worth of shares at a price of R64.86 each. Even though the purchase was made at a significantly lower price than the recent price (R85.50), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn’t tell us much about what they think of current prices.
Happily, we note that in the last year insiders paid R289m for 4.46m shares. But insiders sold 900.00k shares worth R59m. Overall, FirstRand insiders were net buyers during the last year. 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 always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).
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. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 0.3% of FirstRand shares, worth about R1.3b. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At FirstRand Tell Us?
The fact that there have been no FirstRand insider transactions recently certainly doesn’t bother us. But insiders have shown more of an appetite for the stock, over the last year. Judging from their transactions, and high insider ownership, FirstRand insiders feel good about the company’s future. In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing FirstRand. Every company has risks, and we’ve spotted 1 warning sign for FirstRand you should know about.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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 of direct interests only, but not derivative transactions or indirect interests.
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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.