Yahoo Finance Regional Management Corp. (NYSE:RM) Insiders Increased Their Holdings
It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in Regional Management Corp. (NYSE:RM).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.
View our latest analysis for Regional Management
The Last 12 Months Of Insider Transactions At Regional Management
Executive VP & COO John Schachtel made the biggest insider purchase in the last 12 months. That single transaction was for US$183k worth of shares at a price of US$26.30 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$12.58). 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. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
In the last twelve months insiders purchased 23.00k shares for US$609k. But insiders sold 3351 shares worth US$110k. In the last twelve months there was more buying than selling by Regional Management insiders. You can see the insider transactions (by 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!
Regional Management is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does Regional Management Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data indicates that Regional Management insiders own about US$8.1m worth of shares (which is 5.8% of the company). Whilst better than nothing, we're not overly impressed by these holdings.
So What Does This Data Suggest About Regional Management Insiders?
It doesn't really mean much that no insider has traded Regional Management shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. We'd like to see bigger individual holdings. However, we don't see anything to make us think Regional Management insiders are doubting 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. Every company has risks, and we've spotted 3 warning signs for Regional Management (of which 2 are a bit concerning!) you should know about.
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.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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