Should You Review Recent Insider Transactions At Regis Corporation (NYSE:RGS)?

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Regis Corporation (NYSE:RGS).

What Is Insider Selling?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

Check out our latest analysis for Regis

Regis Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, David Williams, sold US$248k worth of shares at a price of US$6.19 per share. That means that an insider was selling shares at slightly below the current price (US$8.78). 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 34% of David Williams's stake.

All up, insiders sold more shares in Regis than they bought, over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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

Insiders at Regis Have Sold Stock Recently

There was substantially more insider selling, than buying, of Regis shares over the last three months. We note insider David Williams cashed in US$248k worth of shares. Meanwhile Executive VP & Chief Marketing Officer James Townsend bought US$33k worth , as we said above . Because the selling vastly outweighs the buying, we'd say this is a somewhat bearish sign.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 2.7% of Regis shares, worth about US$8.3m, according to our data. Whilst better than nothing, we're not overly impressed by these holdings.

So What Do The Regis Insider Transactions Indicate?

Unfortunately, there has been more insider selling of Regis stock, than buying, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. When you consider that most companies have higher levels of insider ownership, we're a little wary. We'd certainly practice some caution before buying! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Case in point: We've spotted 3 warning signs for Regis you should be aware of.

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, 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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