Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of RooLife Group Ltd (ASX:RLG), it sends a favourable message to the company's shareholders.
While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.
See our latest analysis for RooLife Group
RooLife Group Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when insider Xiaodan Wu bought AU$163k worth of shares at a price of AU$0.011 per share. That implies that an insider found the current price of AU$0.011 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for RooLife Group share holders is that insiders were buying at near the current price.
In the last twelve months insiders purchased 17.77m shares for AU$193k. On the other hand they divested 666.67k shares, for AU$6.7k. In total, RooLife Group 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 click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
RooLife Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does RooLife Group Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. RooLife Group insiders own about AU$2.1m worth of shares. That equates to 27% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The RooLife Group Insider Transactions Indicate?
There haven't been any insider transactions in the last three months -- that doesn't mean much. But insiders have shown more of an appetite for the stock, over the last year. Overall we don't see anything to make us think RooLife Group insiders are doubting the company, and they do own shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To help with this, we've discovered 3 warning signs (2 don't sit too well with us!) that you ought to be aware of before buying any shares in RooLife Group.