Last week, Reading International, Inc.'s (NASDAQ:RDI) stock jumped 11%, but insiders who sold US$54k worth of stock in over the past year are likely to be in a better position. Holding on to stock would have meant their investment would be worth less now than it was at the time of sale. Thus selling at an average price of US$1.34, which is higher than the current price, may have been the best decision.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

Reading International Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, Steven Lucas, sold US$54k worth of shares at a price of US$1.36 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$1.20. So it may not tell us anything about how insiders feel about the current share price. Steven Lucas was the only individual insider to sell over 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!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Does Reading International 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. From our data, it seems that Reading International insiders own 13% of the company, worth about US$5.5m. But they may have an indirect interest through a corporate structure that we haven't picked up on. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Does This Data Suggest About Reading International Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. The insider transactions at Reading International are not inspiring us to buy. We also note that, as far as we can see, insider ownership is fairly low, compared to other companies. 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. To help with this, we've discovered 3 warning signs (1 makes us a bit uncomfortable!) that you ought to be aware of before buying any shares in Reading International.

Of course Reading International 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.

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.