Insiders Relieved After Selling BirdDog Technology With 11% Price Dip

Insiders seem to have made the most of their holdings by selling AU$526k worth of BirdDog Technology Limited (ASX:BDT) stock at an average sell price of AU$0.05 during the past year. After the stock price dropped 11% last week, the company's market value declined by AU$1.4m, but insiders were able to mitigate their losses.

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.

See our latest analysis for BirdDog Technology

The Last 12 Months Of Insider Transactions At BirdDog Technology

Over the last year, we can see that the biggest insider sale was by the Co-founder, Daniel Miall, for AU$526k worth of shares, at about AU$0.05 per share. That means that an insider was selling shares at slightly below the current price (AU$0.059). 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. This single sale was just 24% of Daniel Miall's stake. The only individual insider seller over the last year was Daniel Miall. Notably Daniel Miall was also the biggest buyer, having purchased AU$6.4k worth of shares.

The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

I will like BirdDog Technology better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

BirdDog Technology Insiders Are Selling The Stock

The last quarter saw substantial insider selling of BirdDog Technology shares. In total, Co-founder Daniel Miall sold AU$526k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Does BirdDog Technology Boast High 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. A high insider ownership often makes company leadership more mindful of shareholder interests. BirdDog Technology insiders own 59% of the company, currently worth about AU$6.7m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The BirdDog Technology Insider Transactions Indicate?

An insider sold stock recently, but they haven't been buying. Despite some insider buying, the longer term picture doesn't make us feel much more positive. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we've found that BirdDog Technology has 4 warning signs (2 are significant!) that deserve your attention before going any further with your analysis.

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.