Insiders Of Duratec Retain AU$15m Of Investment Selling At Higher Prices

Even though Duratec Limited (ASX:DUR) stock gained 13% last week, insiders who sold AU$15m worth of stock over the past year are probably better off. Selling at an average price of AU$0.97, which is higher than the current price might have been the right call as holding on to stock would have meant their investment would be worth less now than it was at the time of sale.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Duratec

Duratec Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, James Giumelli, for AU$4.2m worth of shares, at about AU$1.19 per share. That means that an insider was selling shares at slightly below the current price (AU$1.57). 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was 100% of James Giumelli's holding.

In the last twelve months insiders purchased 69.28k shares for AU$38k. But insiders sold 15.61m shares worth AU$15m. In total, Duratec insiders sold more than they bought over the last year. The sellers received a price of around AU$0.97, on average. We don't gain confidence from insider selling below the recent share price. Of course, the sales could be motivated for a multitude of reasons, so we shouldn't jump to conclusions. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Does Duratec Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Insiders own 32% of Duratec shares, worth about AU$124m. 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 Do The Duratec Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Duratec insiders selling. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Duratec.

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 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.