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 FONAR Corporation (NASDAQ:FONR).
What Is Insider Buying?
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.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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'.
FONAR Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Chairman of the Board, Raymond Damadian, for US$59k worth of shares, at about US$24.80 per share. So what is clear is that an insider saw fit to sell at around the current price of US$23.55. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive). The only individual insider seller over the last year was Raymond Damadian.
Raymond Damadian ditched 3300 shares over the year. The average price per share was US$24.55. 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!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 5.0% of FONAR shares, worth about US$7.7m, according to our data. Whilst better than nothing, we're not overly impressed by these holdings.
So What Do The FONAR Insider Transactions Indicate?
The fact that there have been no FONAR insider transactions recently certainly doesn't bother us. The insider transactions at FONAR are not inspiring us to buy. And usually insiders own more stock in the company, according to our data. Along with insider transactions, I recommend checking if FONAR is growing revenue. This free chart of historic revenue and earnings should make that easy.
Of course FONAR may not be the best stock to buy. So you may wish to see this free collection of high quality 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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. Thank you for reading.