Have Insiders Been Buying Reedy Lagoon Corporation Limited (ASX:RLC) Shares This Year?

It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we'll take a look at whether insiders have been buying or selling shares in Reedy Lagoon Corporation Limited (ASX:RLC).

What Is Insider Selling?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.

We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

See our latest analysis for Reedy Lagoon

Reedy Lagoon Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by insider Leon Serry for AU$80k worth of shares, at about AU$0.01 per share. Even though the purchase was made at a significantly lower price than the recent price (AU$0.019), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Leon Serry bought a total of 15.00m shares over the year at an average price of AU$0.01. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership of Reedy Lagoon

Many investors like to check how much of a company is owned by 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. Reedy Lagoon insiders own about AU$3.9m worth of shares. That equates to 38% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Reedy Lagoon Insiders?

The fact that there have been no Reedy Lagoon insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in Reedy Lagoon and their transactions don't cause us concern. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Reedy Lagoon. To that end, you should learn about the 5 warning signs we've spotted with Reedy Lagoon (including 3 which are significant).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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, but not derivative transactions.

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This article by Simply Wall St is general in nature. 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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