FlexShopper, Inc. (NASDAQ:FPAY) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 17%, resulting in a US$5.2m rise in the company's market capitalisation, translating to a gain of 43% on their initial investment. As a result, their original purchase of US$616.2k worth of stock is now worth US$883.9k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for FlexShopper

The Last 12 Months Of Insider Transactions At FlexShopper

In the last twelve months, the biggest single purchase by an insider was when Chairman of the Board Howard Dvorkin bought US$106k worth of shares at a price of US$1.12 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$1.67. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

While FlexShopper insiders bought shares during the last year, they didn't sell. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

FlexShopper 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.

FlexShopper Insiders Bought Stock Recently

Over the last quarter, FlexShopper insiders have spent a meaningful amount on shares. Overall, two insiders shelled out US$74k for shares in the company -- and none sold. This makes one think the business has some good points.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. FlexShopper insiders own 60% of the company, currently worth about US$22m 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.

What Might The Insider Transactions At FlexShopper Tell Us?

It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about FlexShopper. Looks promising! 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. Case in point: We've spotted 3 warning signs for FlexShopper you should be aware of, and 1 of these shouldn't be ignored.

But note: FlexShopper 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.