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 Flamingo AI Limited (ASX:FGO).
What Is Insider Selling?
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.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. 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'.
Check out our latest analysis for Flamingo AI
The Last 12 Months Of Insider Transactions At Flamingo AI
While there weren't any large insider transactions in the last twelve months, it's still worth looking at the trading.
You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Flamingo AI is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of Flamingo AI
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. Insiders own 31% of Flamingo AI shares, worth about AU$1.0m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Flamingo AI Insiders?
It doesn't really mean much that no insider has traded Flamingo AI shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in Flamingo AI and we see no evidence to suggest they are worried about the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Flamingo AI. For instance, we've identified 4 warning signs for Flamingo AI (3 can't be ignored) you should be aware of.
But note: Flamingo AI 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.
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. 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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