Insiders Who Sold Rimini Street Made The Right Call As Market Cap Slides By US$38m

By selling US$418k worth of Rimini Street, Inc. (NASDAQ:RMNI) stock at an average sell price of US$2.98 over the last year, insiders seemed to have made the most of their holdings. After the stock price dropped 11% last week, the company's market value declined by US$38m, but insiders were able to mitigate their 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.

Rimini Street Insider Transactions Over The Last Year

The Founder, Seth Ravin, made the biggest insider sale in the last 12 months. That single transaction was for US$244k worth of shares at a price of US$2.98 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$3.47. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 0.7% of Seth Ravin's holding.

Insiders in Rimini Street didn't buy any shares in the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

View our latest analysis for Rimini Street

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

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. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 14% of Rimini Street shares, worth about US$44m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Rimini Street Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. Our analysis of Rimini Street insider transactions leaves us cautious. But we do like the fact that insiders own a fair chunk of the company. 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 1 warning sign for Rimini Street 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 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.