Insiders Give Up AU$39k As RocketDNA Stock Drops To AU$0.009

The recent price decline of 10.0% in RocketDNA Ltd.'s (ASX:RKT) stock may have disappointed insiders who bought AU$375.1k worth of shares at an average price of AU$0.01 in the past 12 months. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth AU$335.8k, which is not great.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

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The Last 12 Months Of Insider Transactions At RocketDNA

Over the last year, we can see that the biggest insider purchase was by insider Michael Spencer for AU$317k worth of shares, at about AU$0.011 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.009). 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. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

While RocketDNA insiders bought shares during the last year, they didn't sell. 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!

See our latest analysis for RocketDNA

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Does RocketDNA Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 18% of RocketDNA shares, worth about AU$1.5m. 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 RocketDNA Insiders?

It doesn't really mean much that no insider has traded RocketDNA shares in the last quarter. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in RocketDNA and their transactions don't cause us concern. 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. At Simply Wall St, we've found that RocketDNA has 5 warning signs (3 can't be ignored!) that deserve your attention before going any further with your analysis.

But note: RocketDNA 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.

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.