Don't Ignore The Fact That This Insider Just Sold Some Shares In Richards Packaging Income Fund (TSE:RPI.UN)

Some Richards Packaging Income Fund (TSE:RPI.UN) shareholders may be a little concerned to see that the Chief Financial Officer, Enzio Di Gennaro, recently sold a substantial CA$773k worth of stock at a price of CA$67.25 per share. That sale reduced their total holding by 23% which is hardly insignificant, but far from the worst we've seen.

See our latest analysis for Richards Packaging Income Fund

Richards Packaging Income Fund Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by CEO & Trustee Gerard Glynn for CA$1.9m worth of shares, at about CA$45.73 per share. Even though the purchase was made at a significantly lower price than the recent price (CA$65.66), we still think insider buying is a positive. 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.

Over the last year, we can see that insiders have bought 45.54k shares worth CA$2.2m. On the other hand they divested 57.50k shares, for CA$2.8m. All up, insiders sold more shares in Richards Packaging Income Fund than they bought, over the last year. 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!

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership of Richards Packaging Income Fund

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Richards Packaging Income Fund insiders own 25% of the company, worth about CA$183m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Richards Packaging Income Fund Insider Transactions Indicate?

Unfortunately, there has been more insider selling of Richards Packaging Income Fund stock, than buying, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. But since Richards Packaging Income Fund is profitable and growing, we're not too worried by this. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - Richards Packaging Income Fund has 3 warning signs we think you should be aware of.

But note: Richards Packaging Income Fund 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, but not derivative transactions.

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