It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Forty Seven, Inc. (NASDAQ:FTSV).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a 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 equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
The Last 12 Months Of Insider Transactions At Forty Seven
Ravi Mhatre made the biggest insider purchase in the last 12 months. That single transaction was for US$1.5m worth of shares at a price of US$15.27 each. That implies that an insider found the current (approximate) price enticing. 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. Nonetheless, we consider it positive if insiders want to buy at around the current share price.
Happily, we note that in the last year insiders bought 207.32k shares for a total of US$3.2m. Overall, Forty Seven insiders were net buyers last year. The average buy price was around US$15.29. Although they bought at below the recent price of US$16.94 per share, it is good to see that insiders are willing to invest in the company. The chart below shows insider transactions over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insider Ownership of Forty Seven
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Forty Seven insiders own about US$78m worth of shares (which is 15% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Forty Seven Insider Transactions Indicate?
It doesn’t really mean much that no insider has traded Forty Seven shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Overall we don’t see anything to make us think Forty Seven insiders are doubting the company, and they do own shares. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Forty Seven.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.