Yahoo Finance Rectifier Technologies' AU$4.1m Market Cap Fall Books Insider Losses
Insiders who acquired AU$547.4k worth of Rectifier Technologies Limited's (ASX:RFT) stock at an average price of AU$0.017 in the past 12 months may be dismayed by the recent 25% 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 AU$289.8k, which is not what they expected.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for Rectifier Technologies
The Last 12 Months Of Insider Transactions At Rectifier Technologies
Over the last year, we can see that the biggest insider purchase was by Executive Director Zorn Wong for AU$527k worth of shares, at about AU$0.017 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.009). 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. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Zorn Wong was the only individual insider to buy during the last year.
Zorn Wong bought 32.20m shares over the last 12 months at an average price of AU$0.017. 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!
Rectifier Technologies is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Rectifier Technologies insiders own 48% of the company, worth about AU$6.0m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Rectifier Technologies Insider Transactions Indicate?
The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Rectifier Technologies. That's what I like to see! 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. Our analysis shows 4 warning signs for Rectifier Technologies (3 make us uncomfortable!) and we strongly recommend you look at them before investing.
Of course Rectifier Technologies may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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 of direct interests only, but not derivative transactions or indirect interests.
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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.
