Even if it's not a huge purchase, we think it was good to see that Gavin Hill, the Independent Non-Executive Director of Forterra plc (LON:FORT) recently shelled out UK£40k to buy stock, at UK£1.38 per share. Although the purchase is not a big one, by either a percentage standpoint or absolute value, it can be seen as a good sign.
Forterra Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Chairman Nigel Lingwood bought UK£90k worth of shares at a price of UK£1.80 per share. That means that even when the share price was higher than UK£1.37 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. 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.
Over the last year, we can see that insiders have bought 171.19k shares worth UK£260k. But they sold 24.94k shares for UK£40k. In total, Forterra insiders bought more than they sold over the last year. They paid about UK£1.52 on average. This is nice to see since it implies that insiders might see value around current prices. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Check out our latest analysis for Forterra
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.
Insider Ownership
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. From looking at our data, insiders own UK£793k worth of Forterra stock, about 0.3% of the company. I generally like to see higher levels of ownership.
So What Does This Data Suggest About Forterra Insiders?
It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Forterra stock. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Forterra. Every company has risks, and we've spotted 2 warning signs for Forterra you should know about.
Of course Forterra 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 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.