It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Dundee Precious Metals Inc.'s (TSE:DPM) case, it's fantastic news for shareholders.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Dundee Precious Metals Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the President, David Rae, sold CA$304k worth of shares at a price of CA$7.60 per share. That means that even when the share price was below the current price of CA$7.90, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was 100% of David Rae's stake. David Rae was the only individual insider to sell over the last year. Notably David Rae was also the biggest buyer, having purchased CA$337k worth of shares.
Over the last year, we can see that insiders have bought 85.27k shares worth CA$337k. But insiders sold 40.00k shares worth CA$304k. Overall, Dundee Precious Metals insiders were net buyers during the last year. The average buy price was around CA$3.95. It is certainly positive to see that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our data indicates that Dundee Precious Metals insiders own about CA$11m worth of shares (which is 0.7% of the company). Whilst better than nothing, we're not overly impressed by these holdings.
So What Do The Dundee Precious Metals Insider Transactions Indicate?
The fact that there have been no Dundee Precious Metals insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think Dundee Precious Metals insiders are doubting the company, and they do own shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. While conducting our analysis, we found that Dundee Precious Metals has 2 warning signs and it would be unwise to ignore them.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.
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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