It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we’ll take a look at whether insiders have been buying or selling shares in Redbubble Limited (ASX:RBL).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. 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.’
Redbubble Insider Transactions Over The Last Year
Non-Executive Director Martin Hosking made the biggest insider sale in the last 12 months. That single transaction was for AU$3.9m worth of shares at a price of AU$1.55 each. While the sale doesn’t make us feel confident, we do note it was conducted at a price well above the current share price, which is AU$0.98. So it may not shed much light on insider confidence at current levels. Notably Martin Hosking was also the biggest buyer, having purchased AU$3.2m worth of shares.
In the last twelve months insiders purchased 2.17m shares for AU$3.2m. But insiders sold 2.60m shares worth AU$4.0m. In total, Redbubble insiders sold more than they bought over the last year. The sellers received a price of around AU$1.55, on average. Insider selling doesn’t make us excited to buy. But the selling was at much higher prices than the current share price (AU$0.98), so it probably doesn’t tell us a lot about the value on offer today. 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!
Redbubble 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.
Redbubble Insiders Bought Stock Recently
It’s good to see that Redbubble insiders have made notable investments in the company’s shares. Overall, 2 insiders shelled out AU$101k for shares in the company — and none sold. This is a positive in our book as it implies some confidence.
Insider Ownership of Redbubble
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. Insiders own 34% of Redbubble shares, worth about AU$85m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Redbubble Tell Us?
The recent insider purchases are heartening. However, the longer term transactions are not so encouraging. While recent transactions indicate confidence in Redbubble, insiders don’t own enough of the company to overcome our cautiousness about the longer term transactions. Overall they seem reasonably aligned. Of course, the future is what matters most. So if you are interested in Redbubble, you should check out this free report on analyst forecasts for the company.
Of course Redbubble may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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 email@example.com. 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.