We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell RMA Global Limited (ASX:RMY), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. 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’.
The Last 12 Months Of Insider Transactions At RMA Global
In the last twelve months, the biggest single purchase by an insider was when Non-Executive Chairman David Williams bought AU$822k worth of shares at a price of AU$0.25 per share. That means that an insider was happy to buy shares at above the current price of AU$0.18. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels. Notably David Williams was also the biggest seller, having sold AU$24k worth of shares.
In the last twelve months insiders purchased 15.9m shares for AU$3.3m. On the other hand they divested 192k shares, for AU$24k. Overall, RMA Global insiders were net buyers last year. They paid about AU$0.21 on average. This is nice to see since it implies that insiders might see value around current prices. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
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).
RMA Global Insiders Bought Stock Recently
Over the last quarter, RMA Global insiders have spent a meaningful amount on shares. We can see that David Williams paid AU$947k for shares in the company. No-one sold. This makes one think the business has some good points.
Does RMA Global Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. RMA Global insiders own 62% of the company, currently worth about AU$46m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About RMA Global Insiders?
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. But we don’t feel the same about the fact the company is making losses. Once you factor in the high insider ownership, it certainly seems like insiders are positive about RMA Global. That’s what I like to see! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for RMA Global.
But note: RMA Global may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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