RocketDNA Insiders Enjoying AU$1.6m Appreciation On AU$4.19m Investment
Insiders who bought RocketDNA Ltd. (ASX:RKT) stock in the last 12 months were richly rewarded last week. The company's market value increased by AU$3.3m as a result of the stock's 11% gain over the same period. As a result, their original purchase of AU$4.19m worth of stock is now worth AU$5.76m.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
RocketDNA Insider Transactions Over The Last Year
In fact, the recent purchase by Daniel Narayan was the biggest purchase of RocketDNA shares made by an insider individual in the last twelve months, according to our records. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.025. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
In the last twelve months RocketDNA insiders were buying shares, but not selling. They paid about AU$0.018 on average. We don't deny that it is nice to see insiders buying stock in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. 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!
View our latest analysis for RocketDNA
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.
RocketDNA Insiders Bought Stock Recently
Over the last three months, we've seen significant insider buying at RocketDNA. Specifically, insider Daniel Narayan bought AU$1.6m worth of shares in that time, and we didn't record any sales whatsoever. This makes one think the business has some good points.
Does RocketDNA 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 31% of RocketDNA shares, worth about AU$10m. 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 RocketDNA Tell Us?
The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest RocketDNA insiders are well aligned, and that they may think the share price is too low. 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. To help with this, we've discovered 3 warning signs (2 make us uncomfortable!) that you ought to be aware of before buying any shares in RocketDNA.
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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.