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In the last year, multiple insiders have substantially increased their holdings of Duxton Farms Limited (ASX:DBF) stock, indicating that insiders' optimism about the company's prospects has increased.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
View our latest analysis for Duxton Farms
The Last 12 Months Of Insider Transactions At Duxton Farms
In fact, the recent purchase by insider Richard Magides was not their only acquisition of Duxton Farms shares this year. Earlier in the year, they paid AU$1.43 per share in a AU$1.0m purchase. That implies that an insider found the current price of AU$1.44 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for Duxton Farms share holders is that insiders were buying at near the current price.
In the last twelve months Duxton Farms insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Duxton Farms is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders At Duxton Farms Have Bought Stock Recently
Over the last quarter, Duxton Farms insiders have spent a meaningful amount on shares. Overall, two insiders shelled out AU$658k for shares in the company -- and none sold. This could be interpreted as suggesting a positive outlook.
Insider Ownership Of Duxton Farms
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Duxton Farms insiders own 26% 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 Do The Duxton Farms Insider Transactions Indicate?
The recent insider purchases are 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 Farms insiders are well aligned, and that they may think the share price is too low. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Duxton Farms. Case in point: We've spotted 3 warning signs for Duxton Farms you should be aware of, and 2 of these make us uncomfortable.