Yahoo Finance Even though Digimarc Corporation's (NASDAQ:DMRC) stock is down 12% this week, insiders who bought lately made a US$16k profit
Digimarc Corporation (NASDAQ:DMRC) insiders who acquired shares over the previous 12 months, can probably afford to ignore the recent 12% decline in the stock price. Even after accounting for the recent loss, the US$143k worth of stock purchased by them is now worth US$159k or in other words, their investment continues to give good returns.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
See our latest analysis for Digimarc
The Last 12 Months Of Insider Transactions At Digimarc
Over the last year, we can see that the biggest insider purchase was by Independent Chairwoman Alicia Syrett for US$114k worth of shares, at about US$28.60 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$32.45. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
Happily, we note that in the last year insiders paid US$143k for 4.90k shares. But insiders sold 600.00 shares worth US$21k. Overall, Digimarc insiders were net buyers during 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!
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).
Insider Ownership of Digimarc
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Digimarc insiders own 25% of the company, currently worth about US$138m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Digimarc Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Digimarc shares in the last quarter. However, our analysis of transactions over the last year is heartening. Judging from their transactions, and high insider ownership, Digimarc insiders feel good about the company's future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 3 warning signs with Digimarc and understanding these should be part of your investment process.
But note: Digimarc 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, 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.
