Dialight Gains 12%, Insider Trades Reap Benefit

Last week, Dialight plc (LON:DIA) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 12% last week, resulting in a UK£9.4m increase in the company's market worth, implying a 50% gain on their initial purchase. In other words, the original US$49.9k purchase is now worth US$75.0k.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Dialight

Dialight Insider Transactions Over The Last Year

The Non-Executive Chairman Neil Johnson made the biggest insider purchase in the last 12 months. That single transaction was for UK£50k worth of shares at a price of UK£1.49 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of UK£2.24. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Dialight is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insider Ownership Of Dialight

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Our data isn't picking up on much insider ownership at Dialight, though insiders do hold about UK£760k worth of shares. This level of insider ownership is notably low, and not very encouraging.

So What Do The Dialight Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. The transactions are fine but it'd be more encouraging if Dialight insiders bought more shares in the company. 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. Case in point: We've spotted 2 warning signs for Dialight you should be aware of, and 1 of these doesn't sit too well with us.

Of course Dialight 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.