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We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in RPM Automotive Group Limited (ASX:RPM).
What Is Insider Buying?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.
See our latest analysis for RPM Automotive Group
The Last 12 Months Of Insider Transactions At RPM Automotive Group
While there weren't any large insider transactions in the last twelve months, it's still worth looking at the trading.
In the last twelve months RPM Automotive Group insiders were buying shares, but not selling. 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!
RPM Automotive Group is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Are RPM Automotive Group Insiders Buying Or Selling?
There was only a small bit of insider buying, worth AU$6.3k, in the last three months. So it is hard to draw any conclusion about how insiders are feeling about the stock, from these recent trades.
Does RPM Automotive Group 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. RPM Automotive Group insiders own about AU$3.8m worth of shares. That equates to 34% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At RPM Automotive Group Tell Us?
Insider purchases may have been minimal, in the last three months, but there was no selling at all. The net investment is not enough to encourage us much. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think RPM Automotive Group insiders are doubting the company, and they do own shares. 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. When we did our research, we found 5 warning signs for RPM Automotive Group (3 can't be ignored!) that we believe deserve your full attention.