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Fortis Inc.'s stock is down 7.0%, but insiders still have about CA$370 in profit after buying earlier this year

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Insiders who bought Fortis Inc. (TSE:FTS) in the last 12 months may probably not pay attention to the stock's recent 7.0% drop. After accounting for the recent loss, the CA$160k worth of shares they purchased is now worth CA$160k, suggesting a good return on their investment.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Fortis

The Last 12 Months Of Insider Transactions At Fortis

In fact, the recent purchase by James Reid was the biggest purchase of Fortis shares made by an insider individual in the last twelve months, according to our records. That means that an insider was happy to buy shares at above the current price of CA$57.96. 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. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

Happily, we note that in the last year insiders paid CA$160k for 2.77k shares. But they sold 365.00 shares for CA$20k. In the last twelve months there was more buying than selling by Fortis insiders. 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!

insider-trading-volume
insider-trading-volume

Fortis is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Fortis Insiders Bought Stock Recently

Over the last quarter, Fortis insiders have spent a meaningful amount on shares. We can see that Executive VP James Reid paid CA$137k for shares in the company. No-one sold. This makes one think the business has some good points.

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. We usually like to see fairly high levels of insider ownership. Fortis insiders own about CA$33m worth of shares. That equates to 0.1% of the company. 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 Does This Data Suggest About Fortis Insiders?

It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest Fortis insiders are well aligned, and that they may think the share price is too low. 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. Every company has risks, and we've spotted 2 warning signs for Fortis (of which 1 is concerning!) you should know about.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.