Quite a few Rocket Lab USA, Inc. (NASDAQ:RKLB) insiders sold their shares over the past year, which may be a cause for concern. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

Rocket Lab USA Insider Transactions Over The Last Year

The CFO, Secretary & Treasurer, Adam Spice, made the biggest insider sale in the last 12 months. That single transaction was for US$435k worth of shares at a price of US$6.96 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of US$5.81. So it may not shed much light on insider confidence at current levels.

Rocket Lab USA insiders didn't buy any shares over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like Rocket Lab USA better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Rocket Lab USA Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Rocket Lab USA shares. In total, insiders dumped US$634k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership Of Rocket Lab USA

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. Rocket Lab USA insiders own about US$12m worth of shares. That equates to 0.4% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Rocket Lab USA Insider Transactions Indicate?

Insiders haven't bought Rocket Lab USA stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Rocket Lab USA. While conducting our analysis, we found that Rocket Lab USA has 3 warning signs and it would be unwise to ignore them.

But note: Rocket Lab USA may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.