Some Freedom Holding Corp. (NASDAQ:FRHC) shareholders may be a little concerned to see that insider Evgeny Ler recently sold a substantial US$3.2m worth of stock at a price of US$159 per share. Probably the most concerning element of the whole transaction is that the disposal amounted to 51% of their entire holding.

Freedom Holding Insider Transactions Over The Last Year

Notably, that recent sale by Evgeny Ler is the biggest insider sale of Freedom Holding shares that we've seen in the last year. That means that an insider was selling shares at slightly below the current price (US$171). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was 51% of Evgeny Ler's holding.

Over the last year we saw more insider selling of Freedom Holding shares, than buying. 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!

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Does Freedom Holding Boast High 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Freedom Holding insiders own about US$7.3b worth of shares (which is 68% 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 stock recently, but they haven't been buying. And our longer term analysis of insider transactions didn't bring confidence, either. 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. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that Freedom Holding is showing 2 warning signs in our investment analysis, and 1 of those shouldn't be ignored...

But note: Freedom Holding 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.

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.