The recent price decline of 16% in Frequency Exchange Corp.'s (CVE:FREQ) stock may have disappointed insiders who bought CA$165.2k worth of shares at an average price of CA$0.26 in the past 12 months. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth CA$138.3k, which is not what they expected.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
Frequency Exchange Insider Transactions Over The Last Year
The Independent Director Scott Owen made the biggest insider purchase in the last 12 months. That single transaction was for CA$139k worth of shares at a price of CA$0.25 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$0.21). It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Over the last year, we can see that insiders have bought 643.07k shares worth CA$165k. But insiders sold 66.00k shares worth CA$21k. In total, Frequency Exchange insiders bought more than they sold over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Check out our latest analysis for Frequency Exchange
Frequency Exchange is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
Frequency Exchange Insiders Bought Stock Recently
Over the last quarter, Frequency Exchange insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought CA$141k worth of shares. This could be interpreted as suggesting a positive outlook.
Does Frequency Exchange Boast High 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. It appears that Frequency Exchange insiders own 22% of the company, worth about CA$3.4m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The Frequency Exchange Insider Transactions Indicate?
It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Insiders likely see value in Frequency Exchange shares, given these transactions (along with notable insider ownership of the company). In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Frequency Exchange. Case in point: We've spotted 3 warning signs for Frequency Exchange you should be aware of, and 1 of them can't be ignored.
Of course Frequency Exchange 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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