Rincon Resources Insider Stock Sellers Must Be Relieved As Market Cap Falls To AU$27m

Over the past year, insiders sold AU$206k worth of Rincon Resources Limited (ASX:RCR) stock at an average price of AU$0.029 per share allowing them to get the most out of their money. The company's market worth decreased by AU$1.4m over the past week after the stock price dropped 19%, although insiders were able to minimize their losses

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.

See our latest analysis for Rincon Resources

Rincon Resources Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, Stephen Dobson, sold AU$133k worth of shares at a price of AU$0.027 per share. That means that even when the share price was below the current price of AU$0.093, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was 100% of Stephen Dobson's holding. The only individual insider seller over the last year was Stephen Dobson.

Happily, we note that in the last year insiders paid AU$184k for 6.11m shares. But they sold 7.00m shares for AU$206k. Stephen Dobson ditched 7.00m shares over the year. The average price per share was AU$0.029. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

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. From our data, it seems that Rincon Resources insiders own 7.6% of the company, worth about AU$2.0m. We do generally prefer see higher levels of insider ownership.

So What Does This Data Suggest About Rincon Resources Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. Our analysis of Rincon Resources insider transactions leaves us unenthusiastic. And we're not picking up on high enough insider ownership to give us any comfort. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Rincon Resources. To help with this, we've discovered 5 warning signs (4 are concerning!) that you ought to be aware of before buying any shares in Rincon Resources.

Of course Rincon Resources may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.