Bullish Royalties Insiders Loaded Up On US$1.3m Of Stock

Quite a few insiders have dramatically grown their holdings in Royalties Inc. (CSE:RI) over the past 12 months. An insider's optimism about the company's prospects is a positive sign.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Royalties

The Last 12 Months Of Insider Transactions At Royalties

In the last twelve months, the biggest single purchase by an insider was when Chairman Timothy Gallagher bought CA$1m worth of shares at a price of CA$0.05 per share. That means that an insider was happy to buy shares at around the current price of CA$0.05. Of course they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. In this case we're pleased to report that the insider purchases were made at close to current prices. We note that Timothy Gallagher was both the biggest buyer and the biggest seller.

In the last twelve months insiders purchased 25.95m shares for CA$1.3m. But they sold 1.50m shares for CA$75k. In the last twelve months there was more buying than selling by Royalties insiders. 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!

Royalties is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Royalties Insiders Bought Stock Recently

Over the last three months, we've seen a bit of insider buying at Royalties. Chairman Timothy Gallagher shelled out CA$18k for shares in that time. It's great to see that insiders are only buying, not selling. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.

Does Royalties Boast High 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 22% of Royalties shares, worth about CA$2.4m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Royalties Insiders?

We note a that there has been a bit of insider buying recently (but no selling). That said, the purchases were not large. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in Royalties and we see no evidence to suggest they are worried about the future. While we like knowing 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. Our analysis shows 6 warning signs for Royalties (5 are a bit unpleasant!) and we strongly recommend you look at them before investing.

Of course Royalties 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.