In the last year, multiple insiders have substantially increased their holdings of Red Rock Resorts, Inc. (NASDAQ:RRR) stock, indicating that insiders' optimism about the company's prospects has increased.

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

Red Rock Resorts Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Chairman & CEO Frank Fertitta for US$5.3m worth of shares, at about US$54.49 per share. That means that even when the share price was higher than US$50.28 (the recent price), an insider wanted to purchase shares. 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.

Over the last year, we can see that insiders have bought 332.00k shares worth US$17m. But they sold 85.86k shares for US$5.0m. Overall, Red Rock Resorts insiders were net buyers during the last year. 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.

Insiders At Red Rock Resorts Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at Red Rock Resorts. Not only was there no selling that we can see, but they collectively bought US$17m worth of shares. That shows some optimism about the company's future.

Does Red Rock Resorts 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. Red Rock Resorts insiders own 9.3% of the company, currently worth about US$505m 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 Does This Data Suggest About Red Rock Resorts Insiders?

It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. When combined with notable insider ownership, these factors suggest Red Rock Resorts insiders are well aligned, and quite possibly think the share price is too low. That's what I like to see! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Red Rock Resorts. To that end, you should learn about the 3 warning signs we've spotted with Red Rock Resorts (including 1 which is 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.