FlexShopper, Inc. (NASDAQ:FPAY) insiders placed bullish bets worth US$2.5m in the last 12 months
Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of FlexShopper, Inc. (NASDAQ:FPAY), that sends out a positive message to the company's shareholders.
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.
See our latest analysis for FlexShopper
FlexShopper Insider Transactions Over The Last Year
The Chairman of the Board Howard Dvorkin made the biggest insider purchase in the last 12 months. That single transaction was for US$366k worth of shares at a price of US$2.57 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$1.63). 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. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
While FlexShopper 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!
FlexShopper is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at FlexShopper Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at FlexShopper. Specifically, Chairman of the Board Howard Dvorkin bought US$332k worth of shares in that time, and we didn't record any sales whatsoever. This makes one think the business has some good points.
Insider Ownership of FlexShopper
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. It appears that FlexShopper insiders own 24% of the company, worth about US$8.3m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At FlexShopper Tell Us?
It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Given that insiders also own a fair bit of FlexShopper we think they are probably pretty confident of a bright future. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. When we did our research, we found 3 warning signs for FlexShopper (1 is significant!) that we believe deserve your full attention.
But note: FlexShopper may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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, but not derivative transactions.
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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.
