RIT Capital Partners Insiders Sell UK£4.8m Of Stock, Possibly Signalling Caution

Over the past year, many RIT Capital Partners Plc (LON:RCP) insiders sold a significant stake in the company which may have piqued investors' interest. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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RIT Capital Partners Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Non-Independent Non-Executive Director, Dame Rothschild, for UK£3.4m worth of shares, at about UK£18.70 per share. That means that an insider was selling shares at around the current price of UK£18.06. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

Over the last year, we can see that insiders have bought 82.00k shares worth UK£1.5m. But insiders sold 260.07k shares worth UK£4.8m. Over the last year we saw more insider selling of RIT Capital Partners shares, than buying. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

See our latest analysis for RIT Capital Partners

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Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. It appears that RIT Capital Partners insiders own 0.3% of the company, worth about UK£8.4m. 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 RIT Capital Partners Insiders?

It doesn't really mean much that no insider has traded RIT Capital Partners shares in the last quarter. The insider transactions at RIT Capital Partners are not inspiring us to buy. We also note that, as far as we can see, insider ownership is fairly low, compared to other companies. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 1 warning sign with RIT Capital Partners and understanding this should be part of your investment process.

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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.