Quite a few insiders have dramatically grown their holdings in FirstRand Limited (JSE:FSR) over the past 12 months. An insider’s optimism about the company’s prospects is a positive sign.
Although we don’t think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
View our latest analysis for FirstRand
FirstRand Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Non-Executive Director, Johan Burger, sold R20m worth of shares at a price of R65.18 per share. That means that an insider was selling shares at around the current price of R64.39. We generally don’t like to see insider selling, but the lower the sale price, the more it concerns us. We note that this sale took place at around the current price, so it isn’t a major concern, though it’s hardly a good sign. Johan Burger was the only individual insider to sell over the last year.
Happily, we note that in the last year insiders paid R44m for 712.93k shares. On the other hand they divested 587.59k shares, for R38m. Overall, FirstRand insiders were net buyers during the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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 FirstRand Have Sold Stock Recently
The last quarter saw substantial insider selling of FirstRand shares. Specifically, Non-Executive Director Johan Burger ditched R38m worth of shares in that time, and we didn’t record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. FirstRand insiders own about R1.2b worth of shares. That equates to 0.3% of the company. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About FirstRand Insiders?
An insider hasn’t bought FirstRand stock in the last three months, but there was some selling. But we take heart from prior transactions. On top of that, insiders own a significant portion of the company. So we’re not too bothered by recent selling. In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing FirstRand. Case in point: We’ve spotted 3 warning signs for FirstRand you should be aware of, and 1 of these makes us a bit uncomfortable.
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.
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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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