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Insiders who bought in the last 12 months lose an additional UK£81k as Rolls-Royce Holdings plc (LON:RR.) drops to UK£6.9b

·3 min read

Insiders who bought UK£311k worth of Rolls-Royce Holdings plc's (LON:RR.) stock at an average buy price of UK£1.12 over the last year may be disappointed by the recent 7.0% decrease in the stock. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth UK£230k which is not ideal.

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 Rolls-Royce Holdings

The Last 12 Months Of Insider Transactions At Rolls-Royce Holdings

The Independent Non-Executive Chairman Anita Frew made the biggest insider purchase in the last 12 months. That single transaction was for UK£97k worth of shares at a price of UK£1.23 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being UK£0.83). It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

While Rolls-Royce Holdings insiders bought shares during the last year, they didn't sell. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
insider-trading-volume

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership Of Rolls-Royce Holdings

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our data suggests Rolls-Royce Holdings insiders own 0.04% of the company, worth about UK£2.8m. I generally like to see higher levels of ownership.

What Might The Insider Transactions At Rolls-Royce Holdings Tell Us?

It doesn't really mean much that no insider has traded Rolls-Royce Holdings shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Rolls-Royce Holdings stock. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Rolls-Royce Holdings. Case in point: We've spotted 1 warning sign for Rolls-Royce Holdings you should be aware of.

But note: Rolls-Royce Holdings 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, but not derivative transactions.

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.

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