As Reliance Worldwide Corporation Limited (ASX:RWC) gains 4.8%, insiders who bought last year may be wishing they had bet higher
Reliance Worldwide Corporation Limited (ASX:RWC) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 4.8%, resulting in a AU$141m rise in the company's market capitalisation. Put another way, the original US$618k acquisition is now worth US$763k.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Check out our latest analysis for Reliance Worldwide
The Last 12 Months Of Insider Transactions At Reliance Worldwide
The Independent Non-Executive Director Sharon McCrohan made the biggest insider purchase in the last 12 months. That single transaction was for AU$114k worth of shares at a price of AU$3.81 each. So it's clear an insider wanted to buy, at around the current price, which is AU$3.95. That means they have been optimistic about the company in the past, though they may have changed their mind. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. Happily, the Reliance Worldwide insiders decided to buy shares at close to current prices.
Reliance Worldwide insiders may have bought shares in the last year, but they didn't sell any. Their average price was about AU$3.20. To my mind it is good that insiders have invested their own money in the company. But we must note that the investments were made at well below today's share price. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Does Reliance Worldwide Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 0.3% of Reliance Worldwide shares, worth about AU$8.1m, according to our data. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
What Might The Insider Transactions At Reliance Worldwide Tell Us?
The fact that there have been no Reliance Worldwide insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Reliance Worldwide stock. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. In terms of investment risks, we've identified 2 warning signs with Reliance Worldwide and understanding these should be part of your investment process.
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.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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