We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Datametrex AI Limited (CVE:DM).
What Is Insider Buying?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. 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 Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
The Last 12 Months Of Insider Transactions At Datametrex AI
CEO & Chairman Jong Ryu made the biggest insider purchase in the last 12 months. That single transaction was for CA$300k worth of shares at a price of CA$0.05 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$0.035). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels. Notably Jong Ryu was also the biggest seller, having sold CA$379k worth of shares.
Over the last year, we can see that insiders have bought 10.1m shares worth CA$505k. On the other hand they divested 9.5m shares, for CA$379k. In the last twelve months there was more buying than selling by Datametrex AI insiders. 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!
Datametrex AI is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of Datametrex AI
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. Insiders own 17% of Datametrex AI shares, worth about CA$1.4m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About Datametrex AI Insiders?
There haven't been any insider transactions in the last three months -- that doesn't mean much. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in Datametrex AI and their transactions don't cause us concern. Of course, the future is what matters most. So if you are interested in Datametrex AI, you should check out this free report on analyst forecasts for the company.
But note: Datametrex AI 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.
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