One Deep Yellow Insider Has Reduced Their Stake

From what we can see, insiders were net sellers in Deep Yellow Limited's (ASX:DYL ) during the past 12 months. That is, insiders sold the stock in greater numbers than they purchased it.

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 Deep Yellow

Deep Yellow Insider Transactions Over The Last Year

The Executive Director, Gillian Swaby, made the biggest insider sale in the last 12 months. That single transaction was for AU$696k worth of shares at a price of AU$1.16 each. That means that an insider was selling shares at slightly below the current price (AU$1.26). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 6.3% of Gillian Swaby's holding. Gillian Swaby was the only individual insider to sell over the last year.

Over the last year, we can see that insiders have bought 196.94k shares worth AU$233k. But they sold 600.00k shares for AU$696k. You can see the insider transactions (by companies and 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!

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

Deep Yellow Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at Deep Yellow. In total, insiders bought AU$180k worth of shares in that time, and we didn't record any sales whatsoever. That shows some optimism about the company's future.

Insider Ownership Of Deep Yellow

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Deep Yellow insiders own 7.2% of the company, worth about AU$88m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Deep Yellow Tell Us?

It is good to see recent purchasing. However, the longer term transactions are not so encouraging. The more recent transactions are a positive, but Deep Yellow insiders haven't shown the sustained enthusiasm that we look for, although they do own a decent number of shares, overall. So they seem pretty well aligned, overall. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. When we did our research, we found 4 warning signs for Deep Yellow (2 make us uncomfortable!) that we believe deserve your full attention.

Of course Deep Yellow may not be the best stock to buy. So you may wish to see this free collection of high quality 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com