Red Cat Holdings Insiders Sell US$24m Of Stock, Possibly Signalling Caution

Over the past year, many Red Cat Holdings, Inc. (NASDAQ:RCAT) insiders sold a significant stake in the company which may have piqued investors' interest. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

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The Last 12 Months Of Insider Transactions At Red Cat Holdings

The insider, George Matus, made the biggest insider sale in the last 12 months. That single transaction was for US$5.3m worth of shares at a price of US$14.67 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of US$8.41. So it may not tell us anything about how insiders feel about the current share price.

In the last year Red Cat Holdings insiders didn't buy any company stock. 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!

Check out our latest analysis for Red Cat Holdings

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Have Red Cat Holdings Insiders Traded Recently?

In the last three months company Independent Director Nicholas Liuzza divested US$2.1k worth of stock. That is not a lot. The net selling is so small that it's hard to draw any conclusions from these recent transactions.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Red Cat Holdings insiders own 14% of the company, worth about US$116m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Red Cat Holdings Insider Transactions Indicate?

While there has not been any insider buying in the last three months, there has been selling. But the sales were small, so we're not concerned. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Red Cat Holdings insider transactions don't fill us with confidence. 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. When we did our research, we found 4 warning signs for Red Cat Holdings (3 are a bit concerning!) that we believe deserve your full attention.

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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.