Explore Firetail Resources's Fair Values from the Community and select yours

Firetail Resources Limited (ASX:FTL) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 12%, resulting in a AU$3.8m rise in the company's market capitalisation, translating to a gain of 94% on their initial investment. Put another way, the original AU$125.7k acquisition is now worth AU$244.4k.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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The Last 12 Months Of Insider Transactions At Firetail Resources

In the last twelve months, the biggest single purchase by an insider was when insider Brett Grosvenor bought AU$80k worth of shares at a price of AU$0.04 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.094. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

While Firetail Resources insiders bought shares during the last year, they didn't sell. Their average price was about AU$0.048. It is certainly positive to see that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. 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!

View our latest analysis for Firetail Resources

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership

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. From our data, it seems that Firetail Resources insiders own 8.4% of the company, worth about AU$3.0m. However, it's possible that insiders might have an indirect interest through a more complex structure. We do generally prefer see higher levels of insider ownership.

What Might The Insider Transactions At Firetail Resources Tell Us?

It doesn't really mean much that no insider has traded Firetail Resources shares in the last quarter. However, our analysis of transactions over the last year is heartening. The transactions are fine but it'd be more encouraging if Firetail Resources insiders bought more shares in the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To that end, you should learn about the 4 warning signs we've spotted with Firetail Resources (including 2 which are potentially serious).

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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 of direct interests only, but not derivative transactions or indirect interests.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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.