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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 we’ll take a look at whether insiders have been buying or selling shares in Renewable Energy Group, Inc. (NASDAQ:REGI).
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
The Last 12 Months Of Insider Transactions At Renewable Energy Group
In the last twelve months, the biggest single sale by an insider was when the Vice President of Corporate Business Development & Legal Affairs, Eric Bowen, sold US$549k worth of shares at a price of US$27.45 per share. While we don’t usually like to see insider selling, it’s more concerning if the sales take price at a lower price. The silver lining is that this sell-down took place above the latest price (US$16.91). So it is hard to draw any strong conclusion from it.
Over the last year, we can see that insiders have bought 8750 shares worth US$187k. But insiders sold 76760 shares worth US$1.9m. All up, insiders sold more shares in Renewable Energy Group than they bought, over the last year. The average sell price was around US$24.96. We are not joyful about insider selling. But we note that the selling, on average, was at well above the recently traded price of US$16.91. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Renewable Energy Group Insiders Bought Stock Recently
Over the last three months, we’ve seen a bit of insider buying at Renewable Energy Group. Director Delbert Christensen bought US$40k worth of shares in that time. It’s great to see that insiders are only buying, not selling. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.
Insider Ownership of Renewable Energy Group
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it’s a good sign if insiders own a significant number of shares in the company. It appears that Renewable Energy Group insiders own 2.2% of the company, worth about US$14m. 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 Renewable Energy Group Tell Us?
Insider purchases may have been minimal, in the last three months, but there was no selling at all. That said, the purchases were not large. Still, the insider transactions at Renewable Energy Group in the last 12 months are not very heartening. But we do like the fact that insiders own a fair chunk of the company. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Renewable Energy Group.
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.