Rent.com.au Insiders Selling AU$4.7m In Stock Relieved As Market Cap Slides To AU$54m

By selling AU$4.7m worth of Rent.com.au Limited (ASX:RNT) stock at an average sell price of AU$0.04 over the last year, insiders seemed to have made the most of their holdings. The company’s market cap plunged by AU$6.6m after price dropped by 11% last week but insiders were able to limit their loss to an extent.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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Rent.com.au Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, Bevan Slattery, for AU$4.7m worth of shares, at about AU$0.04 per share. That means that even when the share price was below the current price of AU$0.049, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was 94% of Bevan Slattery's stake. Bevan Slattery was the only individual insider to sell over the last year.

In the last twelve months insiders purchased 112.72m shares for AU$2.4m. But insiders sold 117.72m shares worth AU$4.7m. 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!

See our latest analysis for Rent.com.au

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Insiders At Rent.com.au Have Sold Stock Recently

There was substantially more insider selling, than buying, of Rent.com.au shares over the last three months. In that time, insider Bevan Slattery dumped AU$4.7m worth of shares. On the flip side, insiders spent AU$517k on purchasing shares. Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the shares are not cheap.

Does Rent.com.au 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. We usually like to see fairly high levels of insider ownership. Rent.com.au insiders own 46% of the company, currently worth about AU$25m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Rent.com.au Tell Us?

Unfortunately, there has been more insider selling of Rent.com.au stock, than buying, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. 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. Case in point: We've spotted 5 warning signs for Rent.com.au you should be aware of, and 2 of these can't be ignored.

Of course Rent.com.au 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 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.