Interesting13 Mar 2019 10:44
Are Insiders Selling Red Emperor Resources NL (ASX:RMP) Stock?
It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we’ll take a look at whether insiders have been buying or selling shares in Red Emperor Resources NL (ASX:RMP).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
The Last 12 Months Of Insider Transactions At Red Emperor Resources
Corporate Advisor Anthony John King made the biggest insider sale in the last 12 months. That single transaction was for AU$1.4m worth of shares at a price of AU$0.087 each. That means that an insider was selling shares at around the current price of AU$0.08. They might be selling for a variety of reasons, but it’s hard to argue this is a bullish sign. We usually pause to reflect on the potential that a stock has a high valuation, if insiders have been selling at around the current price. Anthony John King was the only individual insider to sell shares in the last twelve months. Notably Anthony John King was also the biggest buyer, having purchased AU$289k worth of shares.
Anthony John King ditched 20.57m shares over the year. The average price per share was AU$0.081.
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