Don't Ignore The Insider Selling In Royal Gold

We'd be surprised if Royal Gold, Inc. (NASDAQ:RGLD) shareholders haven't noticed that the Senior VP & General Counsel, Randy Shefman, recently sold US$244k worth of stock at US$244 per share. However, the silver lining is that the sale only reduced their total holding by 9.9%, so we're hesitant to read anything much into it, on its own.

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Royal Gold Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Independent Chairman of the Board, William Hayes, for US$1.2m worth of shares, at about US$277 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of US$226. So it may not shed much light on insider confidence at current levels.

Insiders in Royal Gold didn't buy any shares in the last year. 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 Royal Gold

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

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. It appears that Royal Gold insiders own 0.3% of the company, worth about US$54m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Royal Gold Tell Us?

Insiders sold stock recently, but they haven't been buying. Looking to the last twelve months, our data doesn't show any insider buying. But it is good to see that Royal Gold is growing earnings. While insiders do own shares, they don't own a heap, and they have been selling. So we'd only buy after careful consideration. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - Royal Gold has 2 warning signs we think you should be aware of.

Of course Royal Gold 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.