RCI Hospitality Holdings' US$45m Market Cap Fall Books Insider Losses

Insiders who acquired US$184.5k worth of RCI Hospitality Holdings, Inc.'s (NASDAQ:RICK) stock at an average price of US$53.94 in the past 12 months may be dismayed by the recent 10% price decline. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth US$149.2k, which is not great.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for RCI Hospitality Holdings

The Last 12 Months Of Insider Transactions At RCI Hospitality Holdings

In the last twelve months, the biggest single purchase by an insider was when Chairman Eric Langan bought US$55k worth of shares at a price of US$54.54 per share. That means that even when the share price was higher than US$43.61 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

RCI Hospitality Holdings insiders may have bought shares in the last year, but they didn't sell any. 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!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

RCI Hospitality Holdings Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at RCI Hospitality Holdings. Specifically, Independent Director Elaine Martin bought US$68k worth of shares in that time, and we didn't record any sales whatsoever. That shows some optimism about the company's future.

Insider Ownership Of RCI Hospitality Holdings

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 8.1% of RCI Hospitality Holdings shares, worth about US$33m. 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 RCI Hospitality Holdings Tell Us?

It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. Insiders likely see value in RCI Hospitality Holdings shares, given these transactions (along with notable insider ownership of the company). While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. While conducting our analysis, we found that RCI Hospitality Holdings has 3 warning signs and it would be unwise to ignore them.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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 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