Insiders Made Right Decision To Sell As Rumble Dips 11%

Insiders at Rumble Inc. (NASDAQ:RUM) sold US$6.1m worth of stock at an average price of US$6.07 a share over the past year, making the most of their investment. The company's market valuation decreased by US$255m after the stock price dropped 11% over the past week, but insiders were spared from painful losses.

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.

See our latest analysis for Rumble

Rumble Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Lead Independent Director, Robert Arsov, for US$711k worth of shares, at about US$7.02 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$7.27. 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. We note that the biggest single sale was only 0.7% of Robert Arsov's holding. The only individual insider seller over the last year was Robert Arsov.

Robert Arsov ditched 1.00m shares over the year. The average price per share was US$6.07. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Insiders At Rumble Have Sold Stock Recently

The last quarter saw substantial insider selling of Rumble shares. In total, Lead Independent Director Robert Arsov sold US$1.5m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

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. A high insider ownership often makes company leadership more mindful of shareholder interests. Rumble insiders own 69% of the company, currently worth about US$1.4b based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Rumble Insiders?

An insider sold Rumble shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. It is good to see high insider ownership, but the insider selling leaves us cautious. 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. Every company has risks, and we've spotted 3 warning signs for Rumble you should know about.

But note: Rumble may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.