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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 shareholders might well want to know whether insiders have been buying or selling shares in Real Goods Solar, Inc. (NASDAQ:RGSE).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a 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 logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
Real Goods Solar Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by CEO & Director Dennis Lacey for US$57k worth of shares, at about US$0.57 per share. That means that an insider was happy to buy shares at above the current price. Their view may have changed since then, but at least it shows they felt optimistic at the time. We generally consider it a positive if insiders have been buying on market, even above the current price.
Happily, we note that in the last year insiders bought 670.00k shares for a total of US$332k. In total, Real Goods Solar insiders bought more than they sold over the last year. The average buy price was around US$0.50. It’s great to see insiders putting their own cash into the company’s stock, albeit at below the recent share price (US$0.51). The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Real Goods Solar is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Real Goods Solar Have Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at Real Goods Solar. Not only was there no selling that we can see, but they collectively bought US$255k worth of shares. This could be interpreted as suggesting a positive outlook.
Many investors like to check how much of a company is owned by insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Our data suggests Real Goods Solar insiders own 2.0% of the company, worth about US$804k. We prefer to see high levels of insider ownership.
What Might The Insider Transactions At Real Goods Solar Tell Us?
It’s certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss last year, which makes us a little cautious. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Real Goods Solar stock. To put this in context, take a look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow .
Of course Real Goods Solar may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.