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Trade Alert: The Independent Director Of B. Riley Financial, Inc. (NASDAQ:RILY), Randall

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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

Over the last year, we can see that the biggest insider purchase was by Co-Founder Bryant Riley for US$11m worth of shares, at about US$48.71 per share. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being 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. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

In the last twelve months insiders purchased 1.71m shares for US$43m. But they sold 178.81k shares for US$13m. In the last twelve months there was more buying than selling by B. Riley Financial insiders. They paid about US$25.40 on average. To my mind it is good that insiders have invested their own money 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!

insider-trading-volume
NasdaqGM:RILY Insider Trading Volume December 4th 2022

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership Of B. Riley Financial

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. It’s great to see that B. Riley Financial insiders own 43% of the company, worth about US$569m. 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 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. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about B. Riley Financial. Looks promising! While we like knowing what’s going on with the insider’s ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. At Simply Wall St, we’ve found that B. Riley Financial has 3 warning signs (1 is concerning!) that deserve your attention before going any further with your analysis.

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, but not derivative transactions.

Valuation is complex, but we’re helping make it simple.

Find out whether B. Riley Financial is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

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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