Insiders At Richmond Vanadium Technology Sold AU$2.5m Of Stock Potentially Indicating Weakness

Last week, Richmond Vanadium Technology Limited's (ASX:RVT) stock jumped 12%, but insiders who sold AU$2.5m worth of stock in over the past year are likely to be in a better position. Holding on to stock would have meant their investment would be worth less now than it was at the time of sale. Thus selling at an average price of AU$0.36, which is higher than the current price, may have been the best decision.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Richmond Vanadium Technology

The Last 12 Months Of Insider Transactions At Richmond Vanadium Technology

In the last twelve months, the biggest single sale by an insider was when the insider, Jinru Liu, sold AU$1.3m worth of shares at a price of AU$0.38 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (AU$0.23). So it may not shed much light on insider confidence at current levels. Notably Jinru Liu was also the biggest buyer, having purchased AU$1.2m worth of shares.

In the last twelve months insiders purchased 3.30m shares for AU$1.2m. But they sold 7.17m shares for AU$2.5m. Over the last year we saw more insider selling of Richmond Vanadium Technology shares, than buying. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Richmond Vanadium Technology Insiders Are Selling The Stock

There was substantially more insider selling, than buying, of Richmond Vanadium Technology shares over the last three months. We note insiders cashed in AU$583k worth of shares. On the other hand we note insider Jinru Liu bought AU$382k worth of shares. Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the company has been fully valued in recent months.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 10% of Richmond Vanadium Technology shares, worth about AU$5.3m, according to our data. However, it's possible that insiders might have an indirect interest through a more complex structure. We do generally prefer see higher levels of insider ownership.

So What Do The Richmond Vanadium Technology Insider Transactions Indicate?

Unfortunately, there has been more insider selling of Richmond Vanadium Technology stock, than buying, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. Insiders own relatively few shares in the company, and when you consider the sales, we're not particularly excited about the stock. So we'd only buy after very careful consideration. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. At Simply Wall St, we've found that Richmond Vanadium Technology has 5 warning signs (2 are a bit unpleasant!) that deserve your attention before going any further with your analysis.

Of course Richmond Vanadium Technology 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.