RF Industries Gains 15%, Insider Trades Reap Benefit

Last week, RF Industries, Ltd. (NASDAQ:RFIL) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 15% last week, resulting in a US$12m increase in the company's market worth, implying a 103% gain on their initial purchase. As a result, the stock they originally bought for US$230.6k is now worth US$467.6k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

RF Industries Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Independent Chairman of the Board Mark Holdsworth bought US$71k worth of shares at a price of US$4.07 per share. We do like to see buying, but this purchase was made at well below the current price of US$8.51. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Mark Holdsworth bought a total of 54.94k shares over the year at an average price of US$4.20. 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!

See our latest analysis for RF Industries

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Does RF Industries Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 7.2% of RF Industries shares, worth about US$5.8m, according to our data. But they may have an indirect interest through a corporate structure that we haven't picked up on. We do generally prefer see higher levels of insider ownership.

So What Do The RF Industries Insider Transactions Indicate?

It doesn't really mean much that no insider has traded RF Industries shares in the last quarter. However, our analysis of transactions over the last year is heartening. We'd like to see bigger individual holdings. However, we don't see anything to make us think RF Industries insiders are doubting 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. In terms of investment risks, we've identified 1 warning sign with RF Industries and understanding it should be part of your investment process.

But note: RF Industries 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.