U.S. markets closed
  • S&P Futures

    3,401.75
    +8.25 (+0.24%)
     
  • Dow Futures

    27,659.00
    +78.00 (+0.28%)
     
  • Nasdaq Futures

    11,515.00
    +22.75 (+0.20%)
     
  • Russell 2000 Futures

    1,606.60
    +4.50 (+0.28%)
     
  • Crude Oil

    38.67
    +0.11 (+0.29%)
     
  • Gold

    1,909.60
    +3.90 (+0.20%)
     
  • Silver

    24.57
    +0.15 (+0.59%)
     
  • EUR/USD

    1.1822
    +0.0008 (+0.07%)
     
  • 10-Yr Bond

    0.8010
    -0.0400 (-4.76%)
     
  • Vix

    32.46
    +4.91 (+17.82%)
     
  • GBP/USD

    1.3026
    +0.0005 (+0.04%)
     
  • USD/JPY

    104.7960
    -0.0390 (-0.04%)
     
  • BTC-USD

    13,082.82
    -13.72 (-0.10%)
     
  • CMC Crypto 200

    261.02
    -2.40 (-0.91%)
     
  • FTSE 100

    5,792.01
    -68.27 (-1.16%)
     
  • Nikkei 225

    23,439.64
    -54.70 (-0.23%)
     

Insider Buying: The RareX Limited (ASX:REE) Non-Executive Chairman Just Bought 504% More Shares

Simply Wall St
·3 mins read

Even if it's not a huge purchase, we think it was good to see that John Young, the Non-Executive Chairman of RareX Limited (ASX:REE) recently shelled out AU$100k to buy stock, at AU$0.05 per share. Even though that isn't a massive buy, it did increase their holding by 504%, which is arguably a good sign.

View our latest analysis for RareX

The Last 12 Months Of Insider Transactions At RareX

Notably, that recent purchase by John Young is the biggest insider purchase of RareX shares that we've seen in the last year. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.16. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

While RareX insiders bought shares during the last year, they didn't sell. Their average price was about AU$0.04. We don't deny that it is nice to see insiders buying stock in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
insider-trading-volume

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.

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. We usually like to see fairly high levels of insider ownership. Insiders own 15% of RareX shares, worth about AU$9.9m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About RareX Insiders?

It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Given that insiders also own a fair bit of RareX we think they are probably pretty confident of a bright 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. Our analysis shows 5 warning signs for RareX (2 are a bit unpleasant!) and we strongly recommend you look at them before investing.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.