Last week, De.mem Limited (ASX:DEM) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 20% last week, resulting in a AU$11m increase in the company's market worth. As a result, the stock they originally bought for AU$87k is now worth AU$107k.
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.
The Last 12 Months Of Insider Transactions At De.mem
In the last twelve months, the biggest single purchase by an insider was when CEO & Executive Director Andreas Kroell bought AU$87k worth of shares at a price of AU$0.24 per share. We do like to see buying, but this purchase was made at well below the current price of AU$0.30. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
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!
De.mem 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.
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data suggests De.mem insiders own 4.9% of the company, worth about AU$3.2m. I generally like to see higher levels of ownership.
What Might The Insider Transactions At De.mem Tell Us?
It doesn't really mean much that no insider has traded De.mem shares in the last quarter. However, our analysis of transactions over the last year is heartening. While we have no worries about the insider transactions, we'd be more comfortable if they owned more De.mem stock. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of De.mem.
Of course De.mem 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, but not derivative transactions.
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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.
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