We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 Forum Energy Technologies, Inc. (NYSE:FET).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.
The Last 12 Months Of Insider Transactions At Forum Energy Technologies
Independent Director Andrew Waite made the biggest insider purchase in the last 12 months. That single transaction was for US$750k worth of shares at a price of US$1.28 each. That means that an insider was happy to buy shares at around the current price of US$1.43. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for Forum Energy Technologies share holders is that insiders were buying at near the current price.
In the last twelve months Forum Energy Technologies insiders were buying shares, but not selling. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
Forum Energy Technologies is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Forum Energy Technologies Insiders Bought Stock Recently
Over the last three months, we've seen significant insider buying at Forum Energy Technologies. In total, insiders bought US$2.0m worth of shares in that time, and we didn't record any sales whatsoever. This is a positive in our book as it implies some confidence.
Does Forum Energy Technologies 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. We usually like to see fairly high levels of insider ownership. Our data indicates that Forum Energy Technologies insiders own about US$7.4m worth of shares (which is 4.7% of the company). We do generally prefer see higher levels of insider ownership.
So What Do The Forum Energy Technologies Insider Transactions Indicate?
The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Forum Energy Technologies insiders are expecting a bright future. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Forum Energy Technologies.
But note: Forum Energy Technologies 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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned.
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