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Rural Funds Group (ASX:RFF) Insiders Increased Their Holdings

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Rural Funds Group (ASX:RFF).

Do Insider Transactions Matter?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, most countries require that the company discloses such transactions to the market.

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Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.

View our latest analysis for Rural Funds Group

Rural Funds Group Insider Transactions Over The Last Year

Independent Non-Executive Chairman of Rural Funds Management Limited Leslie Paynter made the biggest insider purchase in the last 12 months. That single transaction was for AU$699k worth of shares at a price of AU$1.77 each. That implies that an insider found the current price of AU$1.94 per share to be enticing. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for Rural Funds Group share holders is that insiders were buying at near the current price.

Rural Funds Group insiders may have bought shares in the last year, but they didn't sell any. The chart below shows insider transactions (by 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!

ASX:RFF Recent Insider Trading April 24th 2020
ASX:RFF Recent Insider Trading April 24th 2020

Rural Funds Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Rural Funds Group Insiders Bought Stock Recently

It's good to see that Rural Funds Group insiders have made notable investments in the company's shares. Overall, two insiders shelled out AU$346k for shares in the company -- and none sold. That shows some optimism about the company's future.

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. We usually like to see fairly high levels of insider ownership. Insiders own 1.4% of Rural Funds Group shares, worth about AU$9.3m, according to our data. Whilst better than nothing, we're not overly impressed by these holdings.

What Might The Insider Transactions At Rural Funds Group Tell Us?

The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Rural Funds Group insiders are expecting a bright future. 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 4 warning signs (1 can't be ignored!) that you ought to be aware of before buying any shares in Rural Funds Group.

But note: Rural Funds Group may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.