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The recent 12% drop in ReNeuron Group plc's (LON:RENE) stock could come as a blow to insiders who purchased UK£49k worth of stock at an average buy price of UK£1.15 over the past 12 months. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth UK£13k, which is not great.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
Check out our latest analysis for ReNeuron Group
The Last 12 Months Of Insider Transactions At ReNeuron Group
Over the last year, we can see that the biggest insider purchase was by Senior Independent Non-Executive Director Barbara Staehelin for UK£49k worth of shares, at about UK£1.15 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being UK£0.30). It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. The only individual insider to buy over the last year was Barbara Staehelin.
The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
ReNeuron 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.
Insider Ownership of ReNeuron Group
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. Our data indicates that ReNeuron Group insiders own about UK£2.1m worth of shares (which is 12% of the company). Whilst better than nothing, we're not overly impressed by these holdings.
So What Do The ReNeuron Group Insider Transactions Indicate?
There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. The transactions are fine but it'd be more encouraging if ReNeuron Group insiders bought more shares in the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that ReNeuron Group is showing 3 warning signs in our investment analysis, and 1 of those shouldn't be ignored...