Yahoo Finance As Rubicon Organics Inc. (CVE:ROMJ) drops to CA$32m market cap, insiders might rethink their CA$1.7m stock purchase earlier this year
Insiders who acquired CA$1.7m worth of Rubicon Organics Inc.'s (CVE:ROMJ) stock at an average price of CA$1.18 in the past 12 months may be dismayed by the recent 21% price decline. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth CA$832k which is not ideal.
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 Rubicon Organics
Rubicon Organics Insider Transactions Over The Last Year
The Independent Chairman Julie Lassonde made the biggest insider purchase in the last 12 months. That single transaction was for CA$770k worth of shares at a price of CA$0.77 each. That means that an insider was happy to buy shares at above the current price of CA$0.57. Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
Happily, we note that in the last year insiders paid CA$1.7m for 1.46m shares. But insiders sold 1.00m shares worth CA$770k. Overall, Rubicon Organics insiders were net buyers during the last year. The average buy price was around CA$1.18. I'd consider this a positive as it suggests insiders see value at around the current price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Are Rubicon Organics Insiders Buying Or Selling?
Over the last three months, we've seen a bit of insider buying at Rubicon Organics. In total, insiders bought CA$779k worth of shares in that time. However, insider Pierre Lassonde netted CA$770k 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
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Rubicon Organics insiders own 54% of the company, worth about CA$17m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Rubicon Organics Tell Us?
We note a that there has been a bit of insider buying recently (but no selling). The net investment is not enough to encourage us much. On a brighter note, the transactions over the last year are encouraging. It would be great to see more insider buying, but overall it seems like Rubicon Organics insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Rubicon Organics. When we did our research, we found 3 warning signs for Rubicon Organics (1 is potentially serious!) that we believe deserve your full attention.
Of course Rubicon Organics may not be the best stock to buy. So you may wish to see this free collection of high quality 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, but not derivative transactions.
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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.
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