Damstra Holdings Reaches AU$27m Market Cap Benefiting Insider Stock Buying

Damstra Holdings Limited (ASX:DTC) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 11%, resulting in a AU$2.6m rise in the company's market capitalisation. As a result, their original purchase of AU$219k worth of stock is now worth AU$291k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Damstra Holdings

Damstra Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Non-Executive Director Drew Fairchild bought AU$147k worth of shares at a price of AU$0.085 per share. We do like to see buying, but this purchase was made at well below the current price of AU$0.10. 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.

Over the last year, we can see that insiders have bought 2.78m shares worth AU$219k. But insiders sold 260.87k shares worth AU$40k. Overall, Damstra Holdings insiders were net buyers during the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Damstra Holdings is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Damstra Holdings Insiders Bought Stock Recently

Over the last quarter, Damstra Holdings insiders have spent a meaningful amount on shares. We can see that Non-Executive Director Drew Fairchild paid AU$147k for shares in the company. No-one sold. This is a positive in our book as it implies some confidence.

Does Damstra Holdings Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Damstra Holdings insiders own about AU$6.5m worth of shares. That equates to 24% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Damstra Holdings Tell Us?

It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Insiders likely see value in Damstra Holdings shares, given these transactions (along with notable insider ownership of the company). While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To that end, you should learn about the 3 warning signs we've spotted with Damstra Holdings (including 2 which make us uncomfortable).

But note: Damstra Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.

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

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.