Investors who take an interest in B. Riley Financial, Inc. (NASDAQ:RILY) should definitely note that the Independent Director, Randall Paulson, recently paid US$42.84 per share to buy US$111k worth of the stock. Although the purchase only increased their holding by 1.0%, it is still a solid purchase in our view.
Check out our latest analysis for B. Riley Financial
B. Riley Financial Insider Transactions Over The Last Year
The Co-Founder Bryant Riley made the biggest insider purchase in the last 12 months. That single transaction was for US$11m worth of shares at a price of US$48.71 each. That means that an insider was happy to buy shares at above the current price of US$45.96. 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. To us, it's very important to consider the price insiders pay for 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 US$43m for 1.71m shares. But they sold 178.81k shares for US$13m. Overall, B. Riley Financial insiders were net buyers during the last year. They paid about US$25.40 on average. We don't deny that it is nice to see insiders buying stock in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
B. Riley Financial is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does B. Riley Financial Boast High 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. B. Riley Financial insiders own 43% of the company, currently worth about US$569m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The B. Riley Financial Insider Transactions Indicate?
It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about B. Riley Financial. That's what I like to see! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To help with this, we've discovered 3 warning signs (1 is a bit concerning!) that you ought to be aware of before buying any shares in B. Riley Financial.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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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