More Money In The Bank For RAS Technology Holdings Insiders Who Divested AU$4.9m

While RAS Technology Holdings Limited (ASX:RTH) shareholders have enjoyed a good week with stock up 10%, they need remain vigilant. The fact that insiders chose to dispose of AU$4.9m worth of stock in the past 12 months even though prices were relatively low could be indicative of some anticipated weakness.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for RAS Technology Holdings

The Last 12 Months Of Insider Transactions At RAS Technology Holdings

In the last twelve months, the biggest single sale by an insider was when the Executive Director & Chief Commercial Director, Gary Crispe, sold AU$3.0m worth of shares at a price of AU$1.20 per share. That means that even when the share price was below the current price of AU$1.50, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 21% of Gary Crispe's stake. Gary Crispe was the only individual insider to sell shares in the last twelve months.

Gary Crispe divested 4.00m shares over the last 12 months at an average price of AU$1.22. You can see the insider transactions (by companies and 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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Insiders At RAS Technology Holdings Have Sold Stock Recently

The last quarter saw substantial insider selling of RAS Technology Holdings shares. In total, Executive Director & Chief Commercial Director Gary Crispe sold AU$1.9m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Does RAS Technology Holdings Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. RAS Technology Holdings insiders own about AU$29m worth of shares (which is 43% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At RAS Technology Holdings Tell Us?

An insider hasn't bought RAS Technology Holdings stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. It is good to see high insider ownership, but the insider selling leaves us cautious. 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. When we did our research, we found 3 warning signs for RAS Technology Holdings (1 shouldn't be ignored!) that we believe deserve your full attention.

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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 of direct interests only, but not derivative transactions or indirect interests.

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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.