Insider Buying: The RCI Hospitality Holdings, Inc. (NASDAQ:RICK) Chairman Just Bought US$59k Worth Of Shares

Simply Wall St
·3 min read

Even if it's not a huge purchase, we think it was good to see that Eric Langan, the Chairman of RCI Hospitality Holdings, Inc. (NASDAQ:RICK) recently shelled out US$59k to buy stock, at US$58.50 per share. Although the purchase is not a big one, by either a percentage standpoint or absolute value, it can be seen as a good sign.

See our latest analysis for RCI Hospitality Holdings

The Last 12 Months Of Insider Transactions At RCI Hospitality Holdings

In fact, the recent purchase by Chairman Eric Langan was not their only acquisition of RCI Hospitality Holdings shares this year. Earlier in the year, they paid US$78.76 per share in a US$79k purchase. That means that an insider was happy to buy shares at above the current price of US$53.91. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

In the last twelve months RCI Hospitality Holdings insiders were buying shares, but not selling. The average buy price was around US$66.95. This is nice to see since it implies that insiders might see value around current prices. 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!

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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).

Does RCI Hospitality Holdings 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that RCI Hospitality Holdings insiders own 8.3% of the company, worth about US$44m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The RCI Hospitality Holdings Insider Transactions Indicate?

It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. Given that insiders also own a fair bit of RCI Hospitality Holdings we think they are probably pretty confident of a bright future. 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. Every company has risks, and we've spotted 4 warning signs for RCI Hospitality Holdings you should know about.

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.