Franchise Group, Inc. (NASDAQ:FRG) up 5.0%, but insiders are still down 14% after purchasing US$4.0m of stock last year
Insiders who bought US$4.0m worth of Franchise Group, Inc. (NASDAQ:FRG) stock in the last year recovered part of their losses as the stock rose by 5.0% last week. The purchase, however, has proven to be a pricey bet, with losses currently totalling US$556k.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for Franchise Group
The Last 12 Months Of Insider Transactions At Franchise Group
In the last twelve months, the biggest single purchase by an insider was when President Brian Kahn bought US$3.8m worth of shares at a price of US$37.50 per share. That means that an insider was happy to buy shares at above the current price of US$32.48. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
In the last twelve months Franchise Group insiders were buying shares, but not selling. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Franchise Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does Franchise Group Boast High Insider Ownership?
Many investors like to check how much of a company is owned by 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. Franchise Group insiders own 33% of the company, currently worth about US$406m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About Franchise Group Insiders?
There haven't been any insider transactions in the last three months -- that doesn't mean much. But insiders have shown more of an appetite for the stock, over the last year. Judging from their transactions, and high insider ownership, Franchise Group insiders feel good about the company's future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we've found that Franchise Group has 3 warning signs (2 are concerning!) that deserve your attention before going any further with your analysis.
But note: Franchise Group may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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