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Several Insiders Invested In Ready Capital Flagging Positive News

It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Ready Capital Corporation's (NYSE:RC) case, it's fantastic news for shareholders.

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.

View our latest analysis for Ready Capital

The Last 12 Months Of Insider Transactions At Ready Capital

Over the last year, we can see that the biggest insider sale was by the Chairman, Thomas Capasse, for US$285k worth of shares, at about US$10.70 per share. 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$8.11. So it may not tell us anything about how insiders feel about the current share price. Thomas Capasse was the only individual insider to sell shares in the last twelve months.

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Happily, we note that in the last year insiders paid US$295k for 34.15k shares. On the other hand they divested 26.62k shares, for US$285k. In the last twelve months there was more buying than selling by Ready Capital insiders. 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!

insider-trading-volume
insider-trading-volume

Ready Capital 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.

Ready Capital Insiders Bought Stock Recently

Over the last quarter, Ready Capital insiders have spent a meaningful amount on shares. In total, insiders bought US$295k worth of shares in that time, and we didn't record any sales whatsoever. That shows some optimism about the company's future.

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. Ready Capital insiders own about US$12m worth of shares. That equates to 0.9% 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 Do The Ready Capital Insider Transactions Indicate?

The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. Insiders likely see value in Ready Capital shares, given these transactions (along with notable insider ownership of 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. Our analysis shows 4 warning signs for Ready Capital (3 don't sit too well with us!) and we strongly recommend you look at them before investing.

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 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.