Trade Alert: The Non Independent Director Of RIT Capital Partners plc (LON:RCP), Jeremy Sillem, Has Just Spent UK£252k Buying 80% More Shares

Investors who take an interest in RIT Capital Partners plc (LON:RCP) should definitely note that the Non Independent Director, Jeremy Sillem, recently paid UK£21.10 per share to buy UK£252k worth of the stock. That certainly has us anticipating the best, especially since they thusly increased their own holding by 80%, potentially signalling some real optimism.

View our latest analysis for RIT Capital Partners

RIT Capital Partners Insider Transactions Over The Last Year

The Non-Independent Non-Executive Director, Hannah Rothschild, made the biggest insider sale in the last 12 months. That single transaction was for UK£1m worth of shares at a price of UK£19.61 each. That means that an insider was selling shares at slightly below the current price (UK£21.45). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 10% of Hannah Rothschild's holding. Hannah Rothschild was the only individual insider to sell over the last year.

Over the last year, we can see that insiders have bought 12.47k shares worth UK£262k. On the other hand they divested 51.00k shares, for UK£1m. 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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insider Ownership of RIT Capital Partners

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. RIT Capital Partners insiders own about UK£168m worth of shares (which is 5.0% of the company). 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 Does This Data Suggest About RIT Capital Partners Insiders?

The recent insider purchase is heartening. However, the longer term transactions are not so encouraging. Overall, we'd prefer see a more sustained buying from directors, but with a significant insider holding and more recent purchases, RIT Capital Partners insiders are reasonably well aligned, and optimistic for the future. 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 - RIT Capital Partners has 1 warning sign we think you should be aware of.

But note: RIT Capital Partners 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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This article by Simply Wall St is general in nature. 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.
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