With Raiz Invest Up 11%, Insider Buyers Count Their Returns

Insiders who bought Raiz Invest Limited (ASX:RZI) stock in the last 12 months were richly rewarded last week. The company's market value increased by AU$6.8m as a result of the stock's 11% gain over the same period. Put another way, the original AU$158.2k acquisition is now worth AU$213.0k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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Raiz Invest Insider Transactions Over The Last Year

The Non-Executive Director Paul Rogan made the biggest insider purchase in the last 12 months. That single transaction was for AU$121k worth of shares at a price of AU$0.62 each. That implies that an insider found the current price of AU$0.68 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for Raiz Invest share holders is that insiders were buying at near the current price.

While Raiz Invest insiders bought shares during the last year, they didn't sell. They paid about AU$0.50 on average. To my mind it is good that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. 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!

Check out our latest analysis for Raiz Invest

Raiz Invest is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, 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. We usually like to see fairly high levels of insider ownership. From our data, it seems that Raiz Invest insiders own 6.8% of the company, worth about AU$4.8m. But they may have an indirect interest through a corporate structure that we haven't picked up on. We do generally prefer see higher levels of insider ownership.

So What Does This Data Suggest About Raiz Invest Insiders?

It doesn't really mean much that no insider has traded Raiz Invest shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Raiz Invest 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. At Simply Wall St, we found 1 warning sign for Raiz Invest that deserve your attention before buying any shares.

But note: Raiz Invest may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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 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.