It is not uncommon to see companies perform well in the years after insiders buy shares. 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 FRP Holdings, Inc. (NASDAQ:FRPH).
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.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
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The Last 12 Months Of Insider Transactions At FRP Holdings
In the last twelve months, the biggest single sale by an insider was when President David deVilliers sold US$651k worth of shares at a price of US$65.12 per share. While the sale doesn’t make us feel confident, we do note it was conducted at a price well above the current share price, which is US$48.67. So it may not tell us anything about how insiders feel about the current share price.
Over the last year, we note insiders sold 43.59k shares worth US$2.8m. In total, FRP Holdings insiders sold more than they bought over the last year. The average sell price was around US$63.37. We are not joyful about insider selling. However, we do note that the average sale price was significantly higher than the current share price (which is US$48.67). You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It’s great to see that FRP Holdings insiders own 35% of the company, worth about US$171m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The FRP Holdings Insider Transactions Indicate?
It doesn’t really mean much that no insider has traded FRP Holdings shares in the last quarter. While we feel good about high insider ownership of FRP Holdings, we can’t say the same about the selling of shares. To put this in context, take a look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow .
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.