Viewing insider transactions for Freelancer Limited’s (ASX:FLN ) over the last year, we see that insiders were net buyers. This means that a larger number of shares were purchased by insiders in relation to shares sold.
Although we don’t think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
In fact, the recent purchase by Founder Robert Barrie was not their only acquisition of Freelancer shares this year. They previously made an even bigger purchase of AU$140k worth of shares at a price of AU$0.20 per share. That implies that an insider found the current price of AU$0.20 per share to be enticing. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today’s share price, as the discount to value may have narrowed with the rising price. Happily, the Freelancer insider decided to buy shares at close to current prices. The only individual insider to buy over the last year was Robert Barrie.
Robert Barrie bought 2.80m shares over the last 12 months at an average price of AU$0.18. 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!
View our latest analysis for Freelancer
Freelancer is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Freelancer insiders own 83% of the company, currently worth about AU$77m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. But we don’t feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Freelancer insiders are well aligned, and quite possibly think the share price is too low. That’s what I like to see! So while it’s helpful to know what insiders are doing in terms of buying or selling, it’s also helpful to know the risks that a particular company is facing. Every company has risks, and we’ve spotted 1 warning sign for Freelancer you should know about.
Source: Freelancer Insider Ups Holding During Year
