Don't Ignore The Insider Selling In Dominion Lending Centres

We wouldn't blame Dominion Lending Centres Inc. (TSE:DLCG) shareholders if they were a little worried about the fact that Geoff Willis, the President of Newton Connectivity Systems recently netted about CA$938k selling shares at an average price of CA$7.50. However, that sale only accounted for 7.1% of their holding, so arguably it doesn't say much about their conviction.

Check out our latest analysis for Dominion Lending Centres

Dominion Lending Centres Insider Transactions Over The Last Year

Notably, that recent sale by Geoff Willis is the biggest insider sale of Dominion Lending Centres shares that we've seen in the last year. That means that even when the share price was below the current price of CA$8.24, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 7.1% of Geoff Willis's holding.

In the last twelve months insiders purchased 18.90k shares for CA$120k. But they sold 250.00k shares for CA$1.4m. Geoff Willis ditched 250.00k shares over the year. The average price per share was CA$5.59. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

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Does Dominion Lending Centres 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. We usually like to see fairly high levels of insider ownership. It's great to see that Dominion Lending Centres insiders own 64% of the company, worth about CA$414m. 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 Does This Data Suggest About Dominion Lending Centres Insiders?

Unfortunately, there has been more insider selling of Dominion Lending Centres stock, than buying, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But it is good to see that Dominion Lending Centres is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. While it's good to be aware of 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. Be aware that Dominion Lending Centres is showing 3 warning signs in our investment analysis, and 2 of those are potentially serious...

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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.