Insiders who bought this year lost R44k as RH Bophelo Limited (JSE:RHB) sheds R32m in value

By
Simply Wall St
Published
December 14, 2021
JSE:RHB
Source: Shutterstock

The recent price decline of 10.0% in RH Bophelo Limited's (JSE:RHB) stock may have disappointed insiders who bought R159k worth of shares at an average price of R6.22 in 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 R115k, which is not great.

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.

See our latest analysis for RH Bophelo

RH Bophelo Insider Transactions Over The Last Year

While there weren't any large insider transactions in the last twelve months, it's still worth looking at the trading.

While RH Bophelo insiders bought shares during the last year, they didn't sell. The average buy price was around R6.22. I'd consider this a positive as it suggests insiders see value at around the current price, which is R4.50. 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!

insider-trading-volume
JSE:RHB Insider Trading Volume December 14th 2021

RH Bophelo is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Does RH Bophelo Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. From looking at our data, insiders own R9.3m worth of RH Bophelo stock, about 3.2% of the company. However, it's possible that insiders might have an indirect interest through a more complex structure. I generally like to see higher levels of ownership.

So What Does This Data Suggest About RH Bophelo Insiders?

The fact that there have been no RH Bophelo insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. The transactions are fine but it'd be more encouraging if RH Bophelo insiders bought more shares in the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 3 warning signs with RH Bophelo and understanding these should be part of your investment process.

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, but not derivative transactions.

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