Rackspace Technology Insiders Lose Out As Stock Sinks To US$1.14

Explore Rackspace Technology's Fair Values from the Community and select yours

The recent 10% drop in Rackspace Technology, Inc.'s (NASDAQ:RXT) stock could come as a blow to insiders who purchased US$50.6k worth of stock at an average buy price of US$2.60 over the past 12 months. 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$22.2k, which is not great.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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Rackspace Technology Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Independent Director Anthony Roberts for US$51k worth of shares, at about US$2.60 per share. That means that even when the share price was higher than US$1.14 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Anthony Roberts was the only individual insider to buy during the last year.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

See our latest analysis for Rackspace Technology

Rackspace Technology is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Does Rackspace Technology Boast High 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Rackspace Technology insiders own about US$11m worth of shares. That equates to 4.0% of the company. 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 Rackspace Technology Insiders?

It doesn't really mean much that no insider has traded Rackspace Technology shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Rackspace Technology and their transactions don't cause us concern. 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. To that end, you should learn about the 3 warning signs we've spotted with Rackspace Technology (including 1 which is significant).

Of course Rackspace Technology may not be the best stock to buy. So you may wish to see this free collection of high quality 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.