Yahoo Finance Multiple insiders bought Downer EDI Limited (ASX:DOW) stock earlier this year, a positive sign for shareholders
When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Downer EDI Limited's (ASX:DOW) instance, it's good 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 Downer EDI
Downer EDI Insider Transactions Over The Last Year
In fact, the recent purchase by Mark Menhinnitt was the biggest purchase of Downer EDI shares made by an insider individual in the last twelve months, according to our records. That means that an insider was happy to buy shares at around the current price of AU$3.40. 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. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. The good news for Downer EDI share holders is that insiders were buying at near the current price.
While Downer EDI insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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 Downer EDI Have Bought Stock Recently
Over the last quarter, Downer EDI insiders have spent a meaningful amount on shares. Overall, two insiders shelled out AU$211k for shares in the company -- and none sold. This makes one think the business has some good points.
Does Downer EDI Boast High 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. We usually like to see fairly high levels of insider ownership. From our data, it seems that Downer EDI insiders own 0.5% of the company, worth about AU$11m. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
So What Do The Downer EDI Insider Transactions Indicate?
It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. Given that insiders also own a fair bit of Downer EDI we think they are probably pretty confident of a bright 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. Every company has risks, and we've spotted 3 warning signs for Downer EDI (of which 1 shouldn't be ignored!) you should know about.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.
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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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