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There is usually nothing wrong with one insider buying shares. But when a significant number of insiders buy stocks, as happened in 2019, FORTRESS MINERALS LIMITED. (Catalog: OAJ) is great news for shareholders.
While insider trading is not the most important thing when it comes to long-term investing, we think it’s perfectly logical to monitor insider activity.
Check out our latest analysis for Fortress Minerals.
Fortress Minerals insider transactions over the past year
We can see that the biggest insider purchase over the last year was by the CEO and Executive Director, Yew Fei Chee, for S$450k worth of shares (approximately S$0.45 per share). This means insiders were willing to buy shares above the current price of S$0.27. It’s entirely possible that they regret their purchase, but it’s more likely that they’re bullish on the company. For us, it’s very important to consider the price insiders pay for shares. As a general rule, if insiders bought shares at a higher price than the current price, they have more positive feelings about the stock. This is because it suggests that insiders thought the stock was good value, even at a high price.
Fortress Minerals insiders bought shares last year, but didn’t sell them. The chart below depicts insider transactions (by companies and individuals) over the past year. Click on the chart to see all individual trades, including stock price, individual, and date.
Fortress Minerals isn’t the only stock that insiders are buying.So take a look at this free A list of growing companies with insider buying.
Have Fortress Minerals insiders made any trades recently?
Mr Chin Hong Loong, a non-executive and non-independent director, bought shares worth just S$5.4 million at the time. That’s no big deal. Looking at the bottom line, we think these recent transactions don’t reveal much about how insiders as a group feel about the company’s prospects.
Insider ownership
If you are a common shareholder, it may be worth checking how many shares are held by company insiders. We think it’s a good sign if insiders own a significant number of shares in the company. It’s great to see that Fortress Minerals insiders own 47% of the company’s shares, worth about S$67m. Most shareholders would welcome this type of insider ownership because it suggests management incentives are well aligned with other shareholders.
So what do Fortress Minerals’ insider transactions tell us?
We note that there has been some recent insider buying (but no selling). Net investment is not enough to encourage us much. However, our analysis of last year’s transactions is encouraging. Fortress Minerals insiders seem to think there’s upside to the business, as high insider ownership is driving trading. So while it’s useful to know what insiders are doing in terms of buying and selling, it’s also useful to know the risks facing a particular company. To help with this, we discovered the following: 4 warning signs To get a better idea of what Fortress Minerals is all about, it’s best to read through it.
If you want to check out another company with potentially better financials, don’t miss this free List of interesting companies with high return on equity and low debt.
For the purposes of this article, insiders are individuals who report their transactions to the relevant regulatory body. The Company currently only accounts for open market transactions and private dispositions of direct profits, and does not account for derivative transactions or indirect profits.
Have feedback on this article? Curious about its content? contact Please contact us directly. Alternatively, email our 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 using only unbiased methodologies, and the articles are not intended as financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
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