Did B. Riley Financial, Inc. (NASDAQ:RILY) Insiders Buy Up More Shares?
We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in B. Riley Financial, Inc. (NASDAQ:RILY).
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.
View our latest analysis for B. Riley Financial
The Last 12 Months Of Insider Transactions At B. Riley Financial
In the last twelve months, the biggest single purchase by an insider was when Chairman & Co-CEO Bryant Riley bought US$4.6m worth of shares at a price of US$46.00 per share. Even though the purchase was made at a significantly lower price than the recent price (US$66.44), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
Over the last year, we can see that insiders have bought 527.03k shares worth US$19m. But insiders sold 26.97k shares worth US$1.5m. In the last twelve months there was more buying than selling by B. Riley Financial insiders. The average buy price was around US$36.67. It is certainly positive to see that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. 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!
B. Riley Financial is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders at B. Riley Financial Have Bought Stock Recently
At B. Riley Financial,over the last quarter, we have observed quite a lot more insider buying than insider selling. Insiders spent US$2.6m on shares. On the other hand, Chief Accounting Officer & Senior VP Howard Weitzman netted US$1.1m by selling. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. B. Riley Financial insiders own about US$633m worth of shares (which is 35% of the company). 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 Do The B. Riley Financial Insider Transactions Indicate?
The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. When combined with notable insider ownership, these factors suggest B. Riley Financial 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 B. Riley Financial has 4 warning signs (2 are significant!) that deserve your attention before going any further with your analysis.
But note: B. Riley Financial 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, but not derivative transactions.
This article by Simply Wall St is general in nature. 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.
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