Investors who take an interest in Duxton Broadacre Farms Limited (ASX:DBF) should definitely note that insider Richard Magides recently paid AU$1.18 per share to buy AU$560k worth of the stock. Although the purchase only increased their holding by 5.7%, it is still a solid purchase in our view.
The Last 12 Months Of Insider Transactions At Duxton Broadacre Farms
In fact, the recent purchase by Richard Magides was the biggest purchase of Duxton Broadacre Farms shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was higher than AU$1.11 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. The only individual insider to buy over the last year was Richard Magides.
You can see the insider transactions (by 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 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.
Does Duxton Broadacre Farms Boast High Insider Ownership?
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. It appears that Duxton Broadacre Farms insiders own 34% of the company, worth about AU$16m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Duxton Broadacre Farms Insiders?
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest Duxton Broadacre Farms insiders are well aligned, and that they may think the share price is too low. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Our analysis shows 4 warning signs for Duxton Broadacre Farms (2 are a bit unpleasant!) and we strongly recommend you look at these before investing.
Of course Duxton Broadacre Farms 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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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