We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So we’ll take a look at whether insiders have been buying or selling shares in Research Frontiers Incorporated (NASDAQ:REFR).
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, rules govern insider transactions, and certain disclosures are required.
We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. 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 Research Frontiers
Over the last year, we can see that the biggest insider purchase was by Kevin Douglas for US$500k worth of shares, at about US$0.92 per share. We do like to see buying, but this purchase was at a lower price. The purchase might not be the best indicator of confidence in the current valuation.
Happily, we note that in the last year insiders paid US$561k for 606.39k shares. On the other hand they divested 18.00k shares, for US$31k. In total, Research Frontiers insiders bought more than they sold over the last year. Their average price was about US$0.93. It is certainly positive to see that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today’s share price. 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!
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Insider Ownership of Research Frontiers
Many investors like to check how much of a company is owned by insiders. 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 12% of Research Frontiers shares, worth about US$7.9m, according to our data. However, it’s possible that insiders might have an indirect interest through a more complex structure. Overall, this level of ownership isn’t that impressive, but it’s certainly better than nothing!
What Might The Insider Transactions At Research Frontiers Tell Us?
There haven’t been any insider transactions in the last three months — that doesn’t mean much. But insiders have shown more of an appetite for the stock, over the last year. We’d like to see bigger individual holdings. However, we don’t see anything to make us think Research Frontiers insiders are doubting the company. I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
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.
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.