It is not uncommon to see companies perform well in the years after insiders buy shares. 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 before you buy or sell Regis Resources Limited (ASX:RRL), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
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.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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.’
Regis Resources Insider Transactions Over The Last Year
COO & Executive Director Paul Thomas made the biggest insider sale in the last 12 months. That single transaction was for AU$728k worth of shares at a price of AU$4.32 each. That means that an insider was selling shares at slightly below the current price (AU$5.40). Even though it doesn’t necessarily mean anything, that’s certainly not a positive sign, in our book. When an insider sells below the current price, it does tend to make us wonder about the current valuation. Please note, however, that this single sale was 63.9% of Paul Thomas’s stake. The only individual insider seller over the last year was Paul Thomas.
Over the last year, we can see that insiders have bought 54.00k shares worth AU$231k. On the other hand they divested 168.42k shares, for AU$728k. 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!
I will like Regis Resources 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 Regis Resources 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. Regis Resources insiders own about AU$53m worth of shares. That equates to 1.9% of the company. 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 Regis Resources Tell Us?
The fact that there have been no Regis Resources insider transactions recently certainly doesn’t bother us. Our analysis of Regis Resources insider transactions leaves us cautious. But we do like the fact that insiders own a fair chunk of the company. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
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.
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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.