Yahoo Finance Insiders purchases in Redstone Resources Limited (ASX:RDS) last year yet to pay off, remain down AU$17k despite recent gains
Insiders who purchased AU$100k worth of Redstone Resources Limited (ASX:RDS) shares over the past year recouped some of their losses after price gained 11% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled AU$17k since the time of purchase.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
See our latest analysis for Redstone Resources
The Last 12 Months Of Insider Transactions At Redstone Resources
Over the last year, we can see that the biggest insider purchase was by Non-Executive Director Edward Van Heemst for AU$100k worth of shares, at about AU$0.012 per share. That means that even when the share price was higher than AU$0.01 (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. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. The only individual insider to buy over the last year was Edward Van Heemst.
You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Redstone Resources is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Does Redstone Resources 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. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Redstone Resources insiders own 29% of the company, worth about AU$2.1m. 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 Redstone Resources Insiders?
It doesn't really mean much that no insider has traded Redstone Resources shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Overall we don't see anything to make us think Redstone Resources insiders are doubting the company, and they do own shares. While we like knowing 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. Case in point: We've spotted 5 warning signs for Redstone Resources you should be aware of, and 4 of these don't sit too well with us.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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, but not derivative transactions.
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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.
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