We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Regis Resources Limited (ASX:RRL), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
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, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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.'
The Last 12 Months Of Insider Transactions At Regis Resources
In the last twelve months, the biggest single sale by an insider was when the Chief Operating Officer, Paul Thomas, sold AU$728k worth of shares at a price of AU$4.32 per share. That means that an insider was selling shares at slightly below the current price (AU$4.61). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was 63.9% of Paul Thomas's holding. Paul Thomas was the only individual insider to sell shares in the last twelve months.
In the last twelve months insiders purchased 71589 shares for AU$322k. But insiders sold 168k shares worth AU$728k. You can see the insider transactions (by 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!
I will like Regis Resources better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Regis Resources Insiders Bought Stock Recently
It's good to see that Regis Resources insiders have made notable investments in the company's shares. Not only was there no selling that we can see, but they collectively bought AU$91k worth of shares. This makes one think the business has some good points.
Does Regis Resources Boast High 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. Insiders own 1.9% of Regis Resources shares, worth about AU$44m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At Regis Resources Tell Us?
The recent insider purchases are heartening. However, the longer term transactions are not so encouraging. The more recent transactions are a positive, but Regis Resources insiders haven't shown the sustained enthusiasm that we look for, although they do own a decent number of shares, overall. So they seem pretty well aligned, overall. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course Regis Resources may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.