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We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Royal Gold, Inc. (NASDAQ:RGLD).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. 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’.
The Last 12 Months Of Insider Transactions At Royal Gold
Over the last year, we can see that the biggest insider sale was by CFO & VP of Strategy William Heissenbuttel for US$596k worth of shares, at about US$91.91 per share. So what is clear is that an insider saw fit to sell at around the current price of US$89.49. They could have a variety of motivations for selling, but it’s still not particularly encouraging to see. We generally tread carefully if insiders have been selling on market, even if they sold slightly above the current price.
Over the last year, we can see that insiders have bought 4.50k shares worth US$348k. But they sold 18.74k for US$1.7m. In total, Royal Gold insiders sold more than they bought over the last year. They sold for an average price of about US$91.96. We don’t gain confidence from insider selling below the recent share price. But we wouldn’t put too much weight on the insider selling. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
I will like Royal Gold better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Does Royal Gold 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 0.7% of Royal Gold shares, worth about US$41m. 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 Royal Gold Tell Us?
It doesn’t really mean much that no insider has traded Royal Gold shares in the last quarter. Still, the insider transactions at Royal Gold in the last 12 months are not very heartening. But it’s good to see that insiders own shares in the company. Of course, the future is what matters most. So if you are interested in Royal Gold, you should check out this free report on analyst forecasts for the company.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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 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.