Read This Before Selling Freehold Royalties Ltd. (TSE:FRU) Shares
We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Freehold Royalties Ltd. (TSE:FRU), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. 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 equally, we would consider it foolish to ignore insider transactions altogether. For example, a Colombia 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’.
See our latest analysis for Freehold Royalties
The Last 12 Months Of Insider Transactions At Freehold Royalties
Chair of the Board Marvin Romanow made the biggest insider purchase in the last 12 months. That single transaction was for CA$265k worth of shares at a price of CA$8.82 each. That means that even when the share price was higher, an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. That purchase may suggest an expectation of positive returns over the long term.
In the last twelve months insiders paid CA$1.0m for 96.85k shares purchased. In total, Freehold Royalties insiders bought more than they sold over the last year. Their average price was about CA$10.51. This is nice to see since it implies that insiders might see value around current prices (around CA$8.57). The chart below shows insider transactions over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insiders at Freehold Royalties Have Bought Stock Recently
It’s good to see that Freehold Royalties insiders have made notable investments in the company’s shares. Overall, 4 insiders shelled out CA$402k for shares in the company — and none sold. This could be interpreted as suggesting a positive outlook.
Does Freehold Royalties Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Freehold Royalties insiders own 0.2% of the company, currently worth about CA$1.9m 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 Does This Data Suggest About Freehold Royalties Insiders?
It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Freehold Royalties insiders are expecting a bright future. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course Freehold Royalties may not be the best stock to buy. So you may wish to see this free collection of high quality 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 editorial-team@simplywallst.com.
