Insider Returns Down To CA$87k As Rain City Resources' Stock Dips 10.0%

Insiders who bought Rain City Resources Inc. (CSE:RAIN) in the last 12 months may probably not pay attention to the stock's recent 10.0% drop. Even after accounting for the recent loss, the CA$336.7k worth of stock purchased by them is now worth CA$423.4k or in other words, their investment continues to give good returns.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Rain City Resources

Rain City Resources Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Chairman David Shaw bought CA$225k worth of shares at a price of CA$0.075 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of CA$0.09. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

Happily, we note that in the last year insiders paid CA$337k for 4.70m shares. But they sold 14.56m shares for CA$218k. Overall, Rain City Resources insiders were net buyers during the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Rain City Resources is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Rain City Resources Insiders Bought Stock Recently

Over the last quarter, Rain City Resources insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought CA$319k worth of shares. That shows some optimism about the company's future.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Rain City Resources insiders own about CA$1.7m worth of shares. That equates to 26% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Rain City Resources Tell Us?

It is good to see recent purchasing. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Insiders likely see value in Rain City Resources shares, given these transactions (along with notable insider ownership of the company). In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Rain City Resources. Every company has risks, and we've spotted 5 warning signs for Rain City Resources you should know about.

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.