Royalties Reaches CA$25m Market Cap Benefiting Insider Stock Buying
Royalties Inc. (CSE:RI) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 10.0% resulting in a CA$2.5m addition to the company’s market value. As a result, their original purchase of CA$379.0k worth of stock is now worth CA$547.0k.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Royalties Insider Transactions Over The Last Year
Notably, that recent purchase by Chairman Timothy Gallagher was not the only time they bought Royalties shares this year. Earlier in the year, they paid CA$0.07 per share in a CA$92k purchase. We do like to see buying, but this purchase was made at well below the current price of CA$0.11. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
Over the last year, we can see that insiders have bought 4.97m shares worth CA$379k. But they sold 214.00k shares for CA$21k. Overall, Royalties insiders were net buyers during the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Check out our latest analysis for Royalties
Royalties 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.
Royalties Insiders Bought Stock Recently
There was some insider buying at Royalties over the last quarter. In that period insiders spent CA$78k on shares. However, Chairman Timothy Gallagher netted CA$21k for sales. It is good to see that insiders have been buying, but they did not buy very many shares, in the scheme of things.
Insider Ownership Of Royalties
Many investors like to check how much of a company is owned by 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. It appears that Royalties insiders own 32% of the company, worth about CA$8.2m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At Royalties Tell Us?
It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. Given that insiders also own a fair bit of Royalties we think they are probably pretty confident of a bright future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 5 warning signs for Royalties you should be aware of, and 3 of these don't sit too well with us.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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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