Insiders who purchased US$2.9m worth of Rent-A-Center, Inc. (NASDAQ:RCII) shares over the past year recouped some of their losses after price gained 8.1% last week. The purchase, however, has proven to be a pricey bet, with losses currently totalling US$379k.
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.
Rent-A-Center Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when CEO & Director Mitchell Fadel bought US$1.1m worth of shares at a price of US$27.08 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$30.74. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
While Rent-A-Center insiders bought shares during the last year, they didn't sell. The average buy price was around US$35.34. I'd consider this a positive as it suggests insiders see value at around the current price. 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Rent-A-Center Insiders Bought Stock Recently
We saw some Rent-A-Center insider buying shares in the last three months. Independent Chairman Jeffrey Brown shelled out US$25k for shares in that time. It's good to see the insider buying, as well as the lack of recent sellers. But the amount invested in the last three months isn't enough for us too put much weight on it, as a single factor.
Does Rent-A-Center Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Rent-A-Center insiders own 10% of the company, currently worth about US$190m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At Rent-A-Center Tell Us?
Our data shows a little insider buying, but no selling, in the last three months. The net investment is not enough to encourage us much. But insiders have shown more of an appetite for the stock, over the last year. Judging from their transactions, and high insider ownership, Rent-A-Center insiders feel good about the company's future. While we like knowing 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. At Simply Wall St, we've found that Rent-A-Center has 4 warning signs (1 can't be ignored!) that deserve your attention before going any further with your analysis.
Of course Rent-A-Center 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.
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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.
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