Shareholders Can't Ignore US$3.0m Of Sales By DUG Technology Insiders

Last week, DUG Technology Ltd's (ASX:DUG) stock jumped 13%, but insiders who sold US$3.0m worth of stock in over the past year are likely to be in a better position. Selling at an average price of US$2.48, which is higher than the current price, may have been the best move for these insiders because their investment would have been worth less now than when they sold.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for DUG Technology

The Last 12 Months Of Insider Transactions At DUG Technology

Over the last year, we can see that the biggest insider sale was by the insider, Alexander Waislitz, for AU$2.2m worth of shares, at about AU$2.67 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is AU$1.27. So it may not shed much light on insider confidence at current levels.

Happily, we note that in the last year insiders paid AU$307k for 165.17k shares. But insiders sold 1.20m shares worth AU$3.0m. In total, DUG Technology insiders sold more than they bought over the last year. 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!

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).

DUG Technology Insiders Bought Stock Recently

Over the last three months, we've seen significantly more insider buying, than insider selling, at DUG Technology. Insiders spent AU$269k on shares. But Independent Non-Executive Director Mark Puzey sold shares worth AU$39k. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that DUG Technology insiders own 24% of the company, worth about AU$41m. 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 DUG Technology Tell Us?

It's certainly positive to see the recent insider purchases. However, the longer term transactions are not so encouraging. While recent transactions indicate confidence in DUG Technology, insiders don't own enough of the company to overcome our cautiousness about the longer term transactions. Overall they seem reasonably aligned. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For instance, we've identified 2 warning signs for DUG Technology (1 makes us a bit uncomfortable) you should be aware of.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.

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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.