When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Rent.com.au Limited's (ASX:RNT) instance, it's good news for shareholders.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Rent.com.au

The Last 12 Months Of Insider Transactions At Rent.com.au

The insider Bevan Slattery made the biggest insider purchase in the last 12 months. That single transaction was for AU$192k worth of shares at a price of AU$0.038 each. That means that an insider was happy to buy shares at above the current price of AU$0.018. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. 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.

In the last twelve months Rent.com.au insiders were buying shares, but not selling. Their average price was about AU$0.024. These transactions suggest that insiders have considered the current price attractive. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Rent.com.au Insiders Bought Stock Recently

Over the last quarter, Rent.com.au insiders have spent a meaningful amount on shares. In total, insiders bought AU$127k worth of shares in that time, and we didn't record any sales whatsoever. That shows some optimism about the company's future.

Does Rent.com.au Boast High 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. Rent.com.au insiders own 46% of the company, currently worth about AU$6.2m 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.

So What Do The Rent.com.au Insider Transactions Indicate?

It is good to see recent purchasing. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Rent.com.au. Nice! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Rent.com.au. Case in point: We've spotted 7 warning signs for Rent.com.au you should be aware of, and 3 of them are a bit concerning.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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 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.