Insiders Buying DelphX Capital Markets Might Wish They Invested More, Stock Gains 16%

DelphX Capital Markets Inc. (CVE:DELX) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 16%, resulting in a CA$3.6m rise in the company's market capitalisation, translating to a gain of 46% on their initial investment. As a result, the stock they originally bought for CA$200.0k is now worth CA$292.0k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for DelphX Capital Markets

DelphX Capital Markets Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Non-Executive Independent Director Salim Hasham bought CA$75k worth of shares at a price of CA$0.09 per share. Even though the purchase was made at a significantly lower price than the recent price (CA$0.14), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

While DelphX Capital Markets insiders bought shares during the last year, they didn't sell. The average buy price was around CA$0.099. It is certainly positive to see 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. By clicking on the graph below, you can see the precise details of each insider transaction!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

DelphX Capital Markets Insiders Bought Stock Recently

There was some insider buying at DelphX Capital Markets over the last quarter. insider Keith Ainsworth purchased CA$50k worth of shares in that period. We like it when there are only buyers, and no sellers. However, in this case the amount invested recently is quite small.

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. Insiders own 19% of DelphX Capital Markets shares, worth about CA$5.1m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About DelphX Capital Markets Insiders?

It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest DelphX Capital Markets insiders are well aligned, and that they may think the share price is too low. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Be aware that DelphX Capital Markets is showing 5 warning signs in our investment analysis, and 2 of those are potentially serious...

Of course DelphX Capital Markets 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 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.