Bullish insiders bet AU$1.5m on Dicker Data Limited (ASX:DDR)
It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Dicker Data Limited's (ASX:DDR) case, it's fantastic news for shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
View our latest analysis for Dicker Data
Dicker Data Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when COO & Executive Director Vladimir Mitnovetski bought AU$242k worth of shares at a price of AU$8.24 per share. That implies that an insider found the current price of AU$8.36 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. In this case we're pleased to report that the insider purchases were made at close to current prices.
In the last twelve months Dicker Data insiders were buying shares, but not selling. Their average price was about AU$10.12. I'd consider this a positive as it suggests insiders see value at around the current price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
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).
Insiders At Dicker Data Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at Dicker Data. Overall, three insiders shelled out AU$377k for shares in the company -- and none sold. This is a positive in our book as it implies some confidence.
Does Dicker Data Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Dicker Data insiders own about AU$967m worth of shares (which is 64% of the company). 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 Dicker Data Insider Transactions Indicate?
It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Dicker Data. One for the watchlist, at least! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 3 warning signs for Dicker Data (2 are potentially serious!) that we believe deserve your full attention.
But note: Dicker Data 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.
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