Insiders who bought AU$320k worth of Decmil Group Limited (ASX:DCG) stock in the last year recovered part of their losses as the stock rose by 12% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled AU$102k since the time of purchase.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At Decmil Group
In the last twelve months, the biggest single purchase by an insider was when Interim CFO & Director Peter Thomas bought AU$200k worth of shares at a price of AU$0.40 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.23). It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
In the last twelve months Decmil Group insiders were buying shares, but not selling. Their average price was about AU$0.34. I'd consider this a positive as it suggests insiders see value at around the current price. 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!
Decmil Group is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Does Decmil Group Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Based on our data, Decmil Group insiders have about 3.9% of the stock, worth approximately AU$1.4m. However, it's possible that insiders might have an indirect interest through a more complex structure. We consider this fairly low insider ownership.
So What Do The Decmil Group Insider Transactions Indicate?
The fact that there have been no Decmil Group insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Decmil Group stock. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Decmil Group. At Simply Wall St, we've found that Decmil Group has 4 warning signs (1 is concerning!) that deserve your attention before going any further with your analysis.
Of course Decmil Group 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, 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.
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