Trade Alert: The Non-Executive Director Of Rhinomed Limited (ASX:RNO), John McBain, Has Just Spent AU$925k Buying 10% More Shares
Rhinomed Limited (ASX:RNO) shareholders (or potential shareholders) will be happy to see that the Non-Executive Director, John McBain, recently bought a whopping AU$925k worth of stock, at a price of AU$0.19. Not only is that a big swing, but it increased their holding size by 10%, which is definitely great to see.
See our latest analysis for Rhinomed
Rhinomed Insider Transactions Over The Last Year
Notably, that recent purchase by John McBain is the biggest insider purchase of Rhinomed shares that we've seen in the last year. That means that an insider was happy to buy shares at around the current price of AU$0.21. That means they have been optimistic about the company in the past, though they may have changed their mind. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. In this case we're pleased to report that the insider purchases were made at close to current prices.
Happily, we note that in the last year insiders paid AU$2.4m for 10.67m shares. But they sold 2.70m shares for AU$861k. Overall, Rhinomed insiders were net buyers during the last year. Their average price was about AU$0.22. This is nice to see since it implies that insiders might see value around current prices. You can see a visual depiction of insider transactions (by companies and 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!
Rhinomed is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with 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. Rhinomed insiders own 73% of the company, currently worth about AU$40m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About Rhinomed Insiders?
The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Rhinomed. One for the watchlist, at least! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Rhinomed. Our analysis shows 6 warning signs for Rhinomed (2 can't be ignored!) and we strongly recommend you look at them before investing.
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.
