Insiders who placed huge bets on The Necessity Retail REIT, Inc. (NASDAQ:RTL) earlier this year would be disappointed with the 17% drop

Insiders who acquired US$1.2m worth of The Necessity Retail REIT, Inc.'s (NASDAQ:RTL) stock at an average price of US$7.05 in the past 12 months may be dismayed by the recent 17% price decline. 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$982k, which is not what they expected.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Necessity Retail REIT

Necessity Retail REIT Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Lead Independent Director Lisa Kabnick bought US$1.0m worth of shares at a price of US$7.02 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$5.93). Their view may have changed since then, but at least it shows they felt optimistic at the time. 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.

In the last twelve months Necessity Retail REIT insiders were buying shares, but not selling. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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).

Does Necessity Retail REIT Boast High 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. We usually like to see fairly high levels of insider ownership. Our data suggests Necessity Retail REIT insiders own 0.6% of the company, worth about US$4.5m. We consider this fairly low insider ownership.

So What Does This Data Suggest About Necessity Retail REIT Insiders?

The fact that there have been no Necessity Retail REIT insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. We'd like to see bigger individual holdings. However, we don't see anything to make us think Necessity Retail REIT insiders are doubting the company. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Every company has risks, and we've spotted 3 warning signs for Necessity Retail REIT 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.

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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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