Several Insiders Invested In Diaceutics Flagging Positive News

It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Diaceutics PLC’s (LON:DXRX) 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, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Diaceutics

Diaceutics Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Chief Commercial Officer, Jordan Clark, sold UK£49k worth of shares at a price of UK£0.98 per share. That means that even when the share price was below the current price of UK£1.02, 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. While insider selling is not a positive sign, we can’t be sure if it does mean insiders think the shares are fully valued, so it’s only a weak sign. We note that the biggest single sale was only 6.6% of Jordan Clark’s holding. Jordan Clark was the only individual insider to sell over the last year.

Happily, we note that in the last year insiders paid UK£55k for 57.51k shares. But they sold 53.00k shares for UK£52k. In the last twelve months there was more buying than selling by Diaceutics insiders. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Diaceutics is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insiders At Diaceutics Have Bought Stock Recently

Over the last three months, we’ve seen a bit of insider buying at Diaceutics. Independent Non-Executive Director Graham Paterson purchased UK£33k worth of shares in that period. We like it when there are only buyers, and no sellers. However, in this case the amount invested recently is quite small.

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Insider Ownership

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Diaceutics insiders own about UK£25m worth of shares. That equates to 29% of the company. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Diaceutics Tell Us?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. The net investment is not enough to encourage us much. However, our analysis of transactions over the last year is heartening. Insiders own shares in Diaceutics and we see no evidence to suggest they are worried about the future. While we like knowing what’s going on with the insider’s ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Case in point: We’ve spotted 1 warning sign for Diaceutics you should be aware of.

But note: Diaceutics 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 of direct interests only, but not derivative transactions or indirect interests.

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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.