Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of FutureFuel Corp. (NYSE:FF), that sends out a positive message to the company's shareholders.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

FutureFuel Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Independent Director Ronald Kruszewski for US$458k worth of shares, at about US$4.60 per share. That implies that an insider found the current price of US$5.03 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. 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. In this case we're pleased to report that the insider purchases were made at close to current prices.

FutureFuel insiders may have bought shares in the last year, but they didn't sell any. 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!

FutureFuel is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

FutureFuel Insiders Bought Stock Recently

Over the last quarter, FutureFuel insiders have spent a meaningful amount on shares. In total, insiders bought US$88k worth of shares in that time, and we didn't record any sales whatsoever. This could be interpreted as suggesting a positive outlook.

Does FutureFuel Boast High Insider Ownership?

Many investors like to check how much of a company is owned by 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. Our data suggests FutureFuel insiders own 1.3% of the company, worth about US$2.9m. However, it's possible that insiders might have an indirect interest through a more complex structure. We consider this fairly low insider ownership.

What Might The Insider Transactions At FutureFuel Tell Us?

It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on FutureFuel stock. 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, FutureFuel has 2 warning signs (and 1 which shouldn't be ignored) we think you should know about.

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.