We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Digimarc Corporation (NASDAQ:DMRC), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
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Digimarc Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by CEO, President & Chairman Bruce Davis for US$323k worth of shares, at about US$32.51 per share. That is hardly a positive sign, even though it took place above the latest price (US$19.65). So it is hard to draw any strong conclusion from it.
Over the last year, we note insiders sold 25.87k shares worth US$795k. Over the last year we saw more insider selling of Digimarc shares, than buying. The sellers received a price of around US$30.73, on average. It is certainly not great to see that insiders have sold shares in the company. However, we do note that the average sale price was significantly higher than the current share price (which is US$19.65). You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
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. We usually like to see fairly high levels of insider ownership. From our data, it seems that Digimarc insiders own 4.0% of the company, worth about US$9.0m. Overall, this level of ownership isn’t that impressive, but it’s certainly better than nothing!
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. The insider transactions at Digimarc are not inspiring us to buy. We also note that, as far as we can see, insider ownership is fairly low, compared to other companies. Of course, the future is what matters most. So if you are interested in Digimarc, you should check out this free report on analyst forecasts for the company.
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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.