We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand,erykah badu concert in houston texas we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell

Firstwave Cloud Technology Limited

(

ASX:FCT

), you may well want to know whether insiders have been buying or selling.

Do Insider Transactions Matter?

It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.

We don’t think shareholders should simply follow insider transactions. 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’.

View our latest analysis for Firstwave Cloud Technology

Firstwave Cloud Technology Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Non-Executive Director Simon Moore bought AU$250k worth of shares at a price of AU$0.23 per share. Although we like to see insider buying, we note that this large purchase was at significantly lower prices. The purchase might not be the best indicator of confidence in the current valuation.

In the last twelve months insiders paid AU$575k for 3.41m shares purchased. Overall, Firstwave Cloud Technology insiders were net buyers last year. The average buy price was around AU$0.17. It is certainly positive to see that insiders have invested their own money in the company. But we must note that the investments were made at well below today’s share price. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

ASX:FCT Recent Insider Trading, March 1st 2019

If you like to buy stocks alongside management, then you might just love this

free

list of companies. (Hint: insiders have been buying them).

Insiders at Firstwave Cloud Technology Have Bought Stock Recently

Over the last three months, we’ve seen significant insider buying at Firstwave Cloud Technology. Overall, 4 insiders shelled out AU$325k for shares in the company — and none sold. That shows some optimism about the company’s future.

Story continues

Insider Ownership of Firstwave Cloud Technology

For a common shareholder, it is worth checking how many shares are held by company 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. It appears that Firstwave Cloud Technology insiders own 29% of the company, worth about AU$22m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Firstwave Cloud Technology Tell Us?

The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. But we don’t feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Firstwave Cloud Technology insiders are well aligned, and that they may think the share price is too low.

I like to dive deeper

into how a company has performed in the past. You can find

historic revenue and earnings in this

detailed graph

.

But note:

Firstwave Cloud Technology 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at

[email protected]

. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.

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