Insiders who bought €229.3k worth of Faron Pharmaceuticals Oy (LON:FARN) stock in the last year have seen some of their losses recouped as the stock gained 11% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled €23k since the time of purchase.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At Faron Pharmaceuticals Oy
In the last twelve months, the biggest single purchase by an insider was when Independent Non-Executive Chairman Tuomo Patsi bought UK£174k worth of shares at a price of UK£0.43 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being UK£0.39). 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. In our view, the price an insider pays for shares is very important. 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.
While Faron Pharmaceuticals Oy insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
See our latest analysis for Faron Pharmaceuticals Oy
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).
Does Faron Pharmaceuticals Oy 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. Insiders own 8.7% of Faron Pharmaceuticals Oy shares, worth about UK£7.0m, according to our data. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
So What Do The Faron Pharmaceuticals Oy Insider Transactions Indicate?
There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. We'd like to see bigger individual holdings. However, we don't see anything to make us think Faron Pharmaceuticals Oy insiders are doubting the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Faron Pharmaceuticals Oy. Case in point: We've spotted 4 warning signs for Faron Pharmaceuticals Oy you should be aware of, and 3 of them are a bit concerning.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.