Those following along with Franklin Resources, Inc. (NYSE:BEN) will no doubt be intrigued by the recent purchase of shares by insider Charles Johnson, who spent a stonking US$2.0m on stock at an average price of US$19.84. While that only increased their holding size by 0.1%, it is still a big swing by our standards.
Franklin Resources Insider Transactions Over The Last Year
In fact, the recent purchase by insider Charles Johnson was not their only acquisition of Franklin Resources shares this year. They previously made an even bigger purchase of US$4.6m worth of shares at a price of US$22.80 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$20.24). Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
Over the last year, we can see that insiders have bought 431.60k shares worth US$9.4m. But they sold 47.00k shares for US$1.3m. In the last twelve months there was more buying than selling by Franklin Resources insiders. 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!
Franklin Resources 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.
Insider Ownership Of Franklin Resources
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Franklin Resources insiders own about US$4.3b worth of shares (which is 41% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The Franklin Resources Insider Transactions Indicate?
It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest Franklin Resources insiders are well aligned, and quite possibly think the share price is too low. One for the watchlist, at least! 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. Case in point: We've spotted 3 warning signs for Franklin Resources you should be aware of.
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.
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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.