As RomReal Limited (OB:ROM) hits kr82m market cap, insiders may be dismayed about not purchasing higher quantities

Published
December 17, 2021
OB:ROM
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RomReal Limited (OB:ROM) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 15% resulting in a kr11m addition to the company’s market value. As a result, their original purchase of €1.1m worth of stock is now worth €1.3m.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for RomReal

RomReal Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Chairman & CEO Kjetil Gronskag for kr554k worth of shares, at about kr1.60 per share. Even though the purchase was made at a significantly lower price than the recent price (kr1.99), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Kjetil Gronskag purchased 670.80k shares over the year. The average price per share was kr1.69. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
OB:ROM Insider Trading Volume December 17th 2021

RomReal is not the only stock that insiders are buying. 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

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. Insiders own 39% of RomReal shares, worth about kr32m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At RomReal Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in RomReal and their transactions don't cause us concern. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing RomReal. In terms of investment risks, we've identified 3 warning signs with RomReal and understanding these should be part of your investment process.

Of course RomReal may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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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