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 shareholders might well want to know whether insiders have been buying or selling shares in Rambus Inc. (NASDAQ:RMBS).
What Is Insider Buying?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
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Rambus Insider Transactions Over The Last Year
Chairman Eric Stang made the biggest insider sale in the last 12 months. That single transaction was for US$74k worth of shares at a price of US$12.33 each. Although we don’t gain confidence from insider selling, we note that this large sale was at well above current price of US$8.47. So it may not shed much light on insider confidence at current levels.
Over the last year, we note insiders sold 11.90k shares worth US$136k. In total, Rambus insiders sold more than they bought over the last year. They sold for an average price of about US$11.47. We are not joyful about insider selling. However, we do note that the average sale price was significantly higher than the current share price (which is US$8.47). You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Does Rambus Boast High Insider Ownership?
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. Our data suggests Rambus insiders own 0.5% of the company, worth about US$4.9m. I generally like to see higher levels of ownership.
What Might The Insider Transactions At Rambus Tell Us?
There haven’t been any insider transactions in the last three months — that doesn’t mean much. We don’t take much encouragement from the transactions by Rambus insiders. And we’re not picking up on high enough insider ownership to give us any comfort. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Rambus.
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.
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.