The fact that multiple Renewable Energy Group, Inc. (NASDAQ:REGI) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, as the latter can be open to many interpretations. However, if numerous insiders are selling, shareholders should investigate more.
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.
The Last 12 Months Of Insider Transactions At Renewable Energy Group
The Lead Independent Director, Christopher Sorrells, made the biggest insider sale in the last 12 months. That single transaction was for US$946k worth of shares at a price of US$65.00 each. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$40.26. So it may not shed much light on insider confidence at current levels.
Happily, we note that in the last year insiders paid US$374k for 7.50k shares. But they sold 81.17k shares for US$5.2m. In total, Renewable Energy Group insiders sold more than they bought over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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Insiders at Renewable Energy Group Have Sold Stock Recently
The last three months saw significant insider selling at Renewable Energy Group. In total, General Counsel & Corporate Secretary Eric Bowen dumped US$569k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.
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. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 2.2% of Renewable Energy Group shares, worth about US$44m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The Renewable Energy Group Insider Transactions Indicate?
An insider sold Renewable Energy Group shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. While insiders do own shares, they don't own a heap, and they have been selling. So we'd only buy after careful consideration. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Renewable Energy Group. To help with this, we've discovered 6 warning signs (2 can't be ignored!) that you ought to be aware of before buying any shares in Renewable Energy Group.
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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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