Some Freedom Holding Corp. (NASDAQ:FRHC) shareholders may be a little concerned to see that the Chief Executive Officer of Freedom Life, Azamat Yerdessov, recently sold a substantial US$890k worth of stock at a price of US$116 per share. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 7.2%.
Freedom Holding Insider Transactions Over The Last Year
Notably, that recent sale by Azamat Yerdessov is the biggest insider sale of Freedom Holding shares that we've seen in the last year. So it's clear an insider wanted to take some cash off the table, even slightly below the current price of US$117. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 7.2% of Azamat Yerdessov's holding.
Freedom Holding insiders didn't buy any shares over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Freedom Holding insiders own about US$5.0b worth of shares (which is 71% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The Freedom Holding Insider Transactions Indicate?
Insiders sold Freedom Holding shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. But since Freedom Holding is profitable and growing, we're not too worried by this. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For example - Freedom Holding has 1 warning sign we think you should be aware of.
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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.
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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.
