Need To Know: Dicker Data Limited (ASX:DDR) Insiders Have Been Buying Shares

It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in Dicker Data Limited (ASX:DDR).

What Is Insider Buying?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, rules govern insider transactions, and certain disclosures are required.

Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

Check out our latest analysis for Dicker Data

Dicker Data Insider Transactions Over The Last Year

The Chairman & CEO David Dicker made the biggest insider purchase in the last 12 months. That single transaction was for AU$239k worth of shares at a price of AU$4.78 each. We do like to see buying, but this purchase was made at well below the current price of AU$10.45. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Dicker Data insiders may have bought shares in the last year, but they didn't sell any. The average buy price was around AU$5.59. To my mind it is good that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Dicker Data is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insiders at Dicker Data Have Bought Stock Recently

Over the last quarter, Dicker Data insiders have spent a meaningful amount on shares. Specifically, COO & Executive Director Vladimir Mitnovetski bought AU$250k 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 Dicker Data

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Dicker Data insiders own about AU$1.2b worth of shares (which is 69% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Dicker Data Insider Transactions Indicate?

It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Dicker Data. One for the watchlist, at least! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 5 warning signs for Dicker Data (1 is a bit unpleasant!) that we believe deserve your full attention.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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, but not derivative transactions.

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This article by Simply Wall St is general in nature. 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.
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