We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Fort St. James Nickel Corp. (CVE:FTJ), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.
Fort St. James Nickel Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by insider Gerald Mitton for CA$100k worth of shares, at about CA$0.10 per share. So it's clear an insider wanted to buy, at around the current price, which is CA$0.10. 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 Fort St. James Nickel share holders is that insiders were buying at near the current price. Notably Gerald Mitton was also the biggest seller.
In the last twelve months insiders purchased 2.00m shares for CA$198k. But insiders sold 250000 shares worth CA$23k. In the last twelve months there was more buying than selling by Fort St. James Nickel insiders. The chart below shows insider transactions (by 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!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Fort St. James Nickel Insiders Bought Stock Recently
At Fort St. James Nickel,over the last quarter, we have observed quite a lot more insider buying than insider selling. In total, two insiders bought CA$198k worth of shares in that time. But we did see insider Gerald Mitton sell shares worth CA$23k. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.
Does Fort St. James Nickel Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Fort St. James Nickel insiders own 43% of the company, currently worth about CA$909k based on the recent share price. 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 Fort St. James Nickel Insider Transactions Indicate?
The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Fort St. James Nickel. Looks promising! 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.
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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