When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in DiscovEx Resources Limited's (ASX:DCX) 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, we would consider it foolish to ignore insider transactions altogether.
View our latest analysis for DiscovEx Resources
DiscovEx Resources Insider Transactions Over The Last Year
The Independent Non-Executive Chairman Heath Hellewell made the biggest insider purchase in the last 12 months. That single transaction was for AU$100k worth of shares at a price of AU$0.0025 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.002). Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
In the last twelve months DiscovEx Resources insiders were buying shares, but not selling. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
DiscovEx Resources is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does DiscovEx Resources Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 18% of DiscovEx Resources shares, worth about AU$1.2m. 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 DiscovEx Resources Insider Transactions Indicate?
It doesn't really mean much that no insider has traded DiscovEx Resources shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Overall we don't see anything to make us think DiscovEx Resources insiders are doubting the company, and they do own shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing DiscovEx Resources. At Simply Wall St, we found 4 warning signs for DiscovEx Resources that deserve your attention before buying any shares.