Insiders At Rio Tinto Group Sold US$10m In Stock, Alluding To Potential Weakness

Over the past year, many Rio Tinto Group (LON:RIO) insiders sold a significant stake in the company which may have piqued investors' interest. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Rio Tinto Group

Rio Tinto Group Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Chief Commercial Officer, Alfredo Barrios, sold UK£4.6m worth of shares at a price of UK£58.39 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (UK£52.51). So it may not tell us anything about how insiders feel about the current share price.

In the last twelve months insiders purchased 1.21k shares for UK£61k. But they sold 184.21k shares for UK£10m. In total, Rio Tinto Group insiders sold more 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!

I will like Rio Tinto Group better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Rio Tinto Group Insiders Are Selling The Stock

Over the last three months, we've seen notably more insider selling, than insider buying, at Rio Tinto Group. In total, Chief Executive of Iron Ore Simon Trott sold UK£984k worth of shares in that time. On the other hand we note Independent Non-Executive Director Kaisa Hietala bought UK£25k worth of shares. Generally this level of net selling might be considered a bit bearish.

Insider Ownership Of Rio Tinto Group

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. We usually like to see fairly high levels of insider ownership. It appears that Rio Tinto Group insiders own 0.05% of the company, worth about UK£42m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Rio Tinto Group Tell Us?

The insider sales have outweighed the insider buying, at Rio Tinto Group, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Rio Tinto Group. At Simply Wall St, we found 2 warning signs for Rio Tinto Group that deserve your attention before buying any shares.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.