Insiders who bought US$110k worth of Ready Capital Corporation's (NYSE:RC) stock at an average buy price of US$15.74 over the last year may be disappointed by the recent 9.7% decrease in the stock. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth US$81k, which is not what they expected.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At Ready Capital
In the last twelve months, the biggest single sale by an insider was when the CFO & Secretary, Andrew Ahlborn, sold US$62k worth of shares at a price of US$13.80 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of US$11.58. So it may not shed much light on insider confidence at current levels. Andrew Ahlborn was the only individual insider to sell shares in the last twelve months.
In the last twelve months insiders purchased 7.00k shares for US$110k. But they sold 4.50k shares for US$62k. In total, Ready Capital insiders bought more than they sold over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Ready Capital is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders At Ready Capital Have Sold Stock Recently
The last quarter saw substantial insider selling of Ready Capital shares. In total, CFO & Secretary Andrew Ahlborn dumped US$62k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.
Insider Ownership Of Ready Capital
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. Ready Capital insiders own about US$13m worth of shares. That equates to 1.0% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About Ready Capital Insiders?
An insider sold Ready Capital shares recently, but they didn't buy any. But we take heart from prior transactions. We like that insiders own a fair amount of the company. So the recent selling doesn't worry us too much. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To help with this, we've discovered 4 warning signs (2 are significant!) that you ought to be aware of before buying any shares in Ready Capital.
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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