We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Family Zone Cyber Safety Limited (ASX:FZO).
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
Family Zone Cyber Safety Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Non-Executive Independent Chairman Peter Pawlowitsch bought AU$500k worth of shares at a price of AU$0.12 per share. We do like to see buying, but this purchase was made at well below the current price of AU$0.47. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
In the last twelve months insiders purchased 4.22m shares for AU$521k. But they sold 33.33k shares for AU$13k. Overall, Family Zone Cyber Safety insiders were net buyers during the last year. 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!
Family Zone Cyber Safety is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Are Family Zone Cyber Safety Insiders Buying Or Selling?
We saw some Family Zone Cyber Safety insider buying shares in the last three months. Independent Non-Executive Director Philip Warren bought AU$21k worth of shares in that time. But Executive Director of Sales & Executive Director Crispin Swan sold AU$13k worth. It is good to see that insiders have been buying, but they did not buy very many shares, in the scheme of things.
Does Family Zone Cyber Safety Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. It appears that Family Zone Cyber Safety insiders own 18% of the company, worth about AU$32m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Family Zone Cyber Safety Insider Transactions Indicate?
Insider purchases may have been minimal, in the last three months, but there was no selling at all. That said, the purchases were not large. However, our analysis of transactions over the last year is heartening. Overall we don't see anything to make us think Family Zone Cyber Safety insiders are doubting the company, and they do own shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 2 warning signs for Family Zone Cyber Safety you should be aware of, and 1 of these makes us a bit uncomfortable.
Of course Family Zone Cyber Safety 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.
This article by Simply Wall St is general in nature. 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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