Revolver Resources Holdings' AU$2.9m Market Cap Fall Books Insider Losses

The recent 13% drop in Revolver Resources Holdings Ltd's (ASX:RRR) stock could come as a blow to insiders who purchased AU$358.5k worth of stock at an average buy price of AU$0.13 over the past 12 months. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only AU$213.3k.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Revolver Resources Holdings

The Last 12 Months Of Insider Transactions At Revolver Resources Holdings

In the last twelve months, the biggest single purchase by an insider was when Independent Non-Executive Director Brian MacDonald bought AU$250k worth of shares at a price of AU$0.13 per share. That means that even when the share price was higher than AU$0.077 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

Revolver Resources Holdings insiders may have bought shares in the last year, but they didn't sell any. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

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 looking at our data, insiders own AU$496k worth of Revolver Resources Holdings stock, about 2.5% of the company. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. We consider this fairly low insider ownership.

What Might The Insider Transactions At Revolver Resources Holdings Tell Us?

It doesn't really mean much that no insider has traded Revolver Resources Holdings shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. We'd like to see bigger individual holdings. However, we don't see anything to make us think Revolver Resources Holdings insiders are doubting the company. 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. Case in point: We've spotted 6 warning signs for Revolver Resources Holdings you should be aware of, and 3 of these can't be ignored.

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 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.