A AU$9.6m Market Cap Boost Pleasing ToDigitalX Insiders

DigitalX Limited (ASX:DCC) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 11% resulting in a AU$9.6m addition to the company’s market value. In other words, the original AU$5.91m purchase is now worth AU$8.95m.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

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DigitalX Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Antanas Guoga bought AU$1.2m worth of shares at a price of AU$0.06 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.082. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

In the last twelve months insiders purchased 109.15m shares for AU$5.9m. But insiders sold 4.58k shares worth AU$215. In total, DigitalX insiders bought more than they sold over the last year. 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!

View our latest analysis for DigitalX

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

DigitalX Insiders Bought Stock Recently

It's good to see that DigitalX insiders have made notable investments in the company's shares. Overall, two insiders shelled out AU$2.5m for shares in the company -- and none sold. This could be interpreted as suggesting a positive outlook.

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. We usually like to see fairly high levels of insider ownership. It appears that DigitalX insiders own 32% of the company, worth about AU$32m. 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 DigitalX Tell Us?

The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Insiders likely see value in DigitalX shares, given these transactions (along with notable insider ownership of the company). In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing DigitalX. Every company has risks, and we've spotted 4 warning signs for DigitalX (of which 2 shouldn't be ignored!) you should know about.

Of course DigitalX 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.