Flexiroam Limited (ASX:FRX) shareholders (or potential shareholders) will be happy to see that the Founder & Non-Executive Director, Kenn Ong, recently bought a whopping AU$1.2m worth of stock, at a price of AU$0.005. That increased their holding by a full 411%, which arguably implies the sort of confidence required for a shy sweet-natured nerd to ask the most popular kid in the school to go out on a date.

Check out our latest analysis for Flexiroam

Flexiroam Insider Transactions Over The Last Year

Notably, that recent purchase by Kenn Ong is the biggest insider purchase of Flexiroam shares that we've seen in the last year. Even though the purchase was made at a significantly lower price than the recent price (AU$0.006), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

Happily, we note that in the last year insiders paid AU$3.6m for 362.95m shares. On the other hand they divested 73.28m shares, for AU$366k. Overall, Flexiroam insiders were net buyers during the last year. The average buy price was around AU$0.0099. These transactions suggest that insiders have considered the current price attractive. 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!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insider Ownership Of Flexiroam

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with 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's great to see that Flexiroam insiders own 58% of the company, worth about AU$2.8m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Flexiroam Insiders?

The recent insider purchases are 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 Flexiroam insiders are well aligned, and quite possibly think the share price is too low. Nice! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we've found that Flexiroam has 4 warning signs (3 are a bit concerning!) that deserve your attention before going any further with your analysis.

But note: Flexiroam 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.

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.