Investors who take an interest in Frontline Ltd. (NYSE:FRO) should definitely note that the Chief Executive Officer of Frontline Management AS, Robert Macleod, recently paid US$7.85 per share to buy US$392k worth of the stock. Although the purchase only increased their holding by 5.0%, it is still a solid purchase in our view.
The Last 12 Months Of Insider Transactions At Frontline
In fact, the recent purchase by Chief Executive Officer of Frontline Management AS Robert Macleod was not their only acquisition of Frontline shares this year. Earlier in the year, they paid US$10.99 per share in a US$2.2m purchase. That means that an insider was happy to buy shares at above the current price of US$7.95. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Robert Macleod was the only individual insider to buy shares in the last twelve months.
Robert Macleod bought 252.00k shares over the last 12 months at an average price of US$10.37. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Does Frontline Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 0.6% of Frontline shares, worth about US$9.8m, according to our data. However, it's possible that insiders might have an indirect interest through a more complex structure. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
What Might The Insider Transactions At Frontline Tell Us?
The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. 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 Frontline stock. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For instance, we've identified 5 warning signs for Frontline (2 make us uncomfortable) you should be aware of.
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, but not derivative transactions.
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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. Thank you for reading.