Insiders Could Have Profited By Holding onto Richmond Vanadium Technology Shares Despite 15% Drop

Despite the fact that Richmond Vanadium Technology Limited's (ASX:RVT) value has dropped 15% in the last week insiders who sold AU$1.3m worth of stock in the past 12 months have had less success. Insiders might have been better off holding onto their shares, given that the average selling price of AU$0.38 is still below the current share price.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Richmond Vanadium Technology

The Last 12 Months Of Insider Transactions At Richmond Vanadium Technology

The insider, Jinru Liu, made the biggest insider sale in the last 12 months. That single transaction was for AU$1.3m worth of shares at a price of AU$0.38 each. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is AU$0.27. So it is hard to draw any strong conclusion from it. Jinru Liu was the only individual insider to sell over the last year.

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!

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. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data indicates that Richmond Vanadium Technology insiders own about AU$6.7m worth of shares (which is 11% of the company). We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Does This Data Suggest About Richmond Vanadium Technology Insiders?

The fact that there have been no Richmond Vanadium Technology insider transactions recently certainly doesn't bother us. Our analysis of Richmond Vanadium Technology insider transactions leaves us unenthusiastic. We also note that, as far as we can see, insider ownership is fairly low, compared to other companies. 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. Be aware that Richmond Vanadium Technology is showing 4 warning signs in our investment analysis, and 3 of those make us uncomfortable...

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com