Rubicon Organics Insiders Make Handsome Sum Selling Stock At CA$0.38 Per Share

Although Rubicon Organics Inc. (CVE:ROMJ) shareholders have enjoyed a great week with the stock up 14%, insiders who sold stock over the past year haven't fared as well. The return on their investment would have been much higher had they held on to their stock.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Rubicon Organics

Rubicon Organics Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, Eric Savics, sold CA$379k worth of shares at a price of CA$0.38 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of CA$0.49. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 9.5% of Eric Savics's stake. Eric Savics was the only individual insider to sell over the last year.

In the last twelve months insiders purchased 537.20k shares for CA$236k. But insiders sold 989.00k shares worth CA$379k. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

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Insiders At Rubicon Organics Have Sold Stock Recently

There was substantially more insider selling, than buying, of Rubicon Organics shares over the last three months. We note insider Eric Savics cashed in CA$379k worth of shares. On the flip side, insiders spent CA$126k on purchasing shares. Generally this level of net selling might be considered a bit bearish.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Rubicon Organics insiders own 43% of the company, currently worth about CA$12m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Rubicon Organics Tell Us?

The stark truth for Rubicon Organics is that there has been more insider selling than insider buying in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To help with this, we've discovered 4 warning signs (1 is a bit unpleasant!) that you ought to be aware of before buying any shares in Rubicon Organics.

But note: Rubicon Organics 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com