Will Insiders Be Tempted To Buy More FIO At The New 52-Week Low?

In trading on Tuesday, shares of Fusion-io Inc. (FIO) touched a new 52-week low of $9.27/share. That's a $15.28 share price drop, or -62.24% decline from the 52-week high of $24.55 set back on 12/18/2012. Large percentage drops always require that the stock post even larger percentage gains from the low in order to recover the old price point, and for FIO that means the stock would have to gain 164.83% to get back to the 52-week high. For a move like that, Fusion-io Inc. would need fundamental strength at the business level.

Here's a rhetorical question: Who knows more about fundamentals at the business level than the company's own insiders? So let's take a look to see whether any company insiders were taking the other side of the trade as FIO shares were being sold down to this new 52-week low, focusing on the most recent trailing six month period. As summarized by the table below, FIO has seen 2 different instances of insiders buying over the past six months.

START SLIDESHOW:
Ten Bargains You Can Buy Cheaper Than The Insiders Did »

Purchased Insider Title Shares Price/Share Value
10/25/2013 Shawn J. Lindquist Chief Legal Officer 11,000 $9.49 $104,445.00
10/25/2013 Shane V. Robison Chief Executive Officer 105,500 $9.52 $1,004,476.05

In the short run, while the new 52-week low suggests the stock is at the cheapest price and perhaps therefore the best bargain it has been over the last 52 weeks, the low print also means anyone who has purchased the stock over that timeframe is staring at an unrealized loss. Oftentimes, that factor drives a stock's technical analysis metrics by creating overhead resistance, with investors who bought higher now anxious to reverse their trade once they are back to breakeven. The chart below shows where FIO has traded over the past year, with the 50-day and 200-day moving averages included.

Fusion-io Inc. Moving Averages Chart

Time will tell whether the insider purchases foretell a future rebound for FIO shares, which are presently showing a last trade of $9.49/share, slightly above the new 52-week low.

null

More from Stocks

Tech Stocks Have You Baffled? Educate Yourself in Some Portfolio Diversification

Tech Stocks Have You Baffled? Educate Yourself in Some Portfolio Diversification

Alphabet Shares Rise on Earnings, Revenue Beat But Some Concerns Remain

Alphabet Shares Rise on Earnings, Revenue Beat But Some Concerns Remain

Semiconductor Stocks Get Smashed Again as Earnings Weakness Continues
Dow and Nasdaq Finish Lower as 10-Year Treasury Yield Hovers Near 3%

Dow and Nasdaq Finish Lower as 10-Year Treasury Yield Hovers Near 3%

Video: Jim Cramer on Trade Tariffs, Rising Rates, Kimberly Clark and Hasbro

Video: Jim Cramer on Trade Tariffs, Rising Rates, Kimberly Clark and Hasbro