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When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Red River Bancshares, Inc.'s (NASDAQ:RRBI) instance, it's good news for shareholders.
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.
View our latest analysis for Red River Bancshares
The Last 12 Months Of Insider Transactions At Red River Bancshares
Over the last year, we can see that the biggest insider sale was by the Executive VP & Chief Lending Officer at Red River Bank, Bryon Salazar, for US$136k worth of shares, at about US$50.11 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$52.22. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 11% of Bryon Salazar's holding.
Over the last year, we can see that insiders have bought 10.70k shares worth US$519k. On the other hand they divested 3.69k shares, for US$185k. In the last twelve months there was more buying than selling by Red River Bancshares insiders. You can see the insider transactions (by companies and 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!
There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).
Red River Bancshares Insiders Bought Stock Recently
There was some insider buying at Red River Bancshares over the last quarter. Independent Chairman Teddy Price shelled out US$37k for shares in that time. It's good to see the insider buying, as well as the lack of recent sellers. But the amount invested in the last three months isn't enough for us too put much weight on it, as a single factor.
Insider Ownership
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Red River Bancshares insiders own 30% of the company, worth about US$106m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.