Keep An Eye On DT Capital As Insider Stock Selling Hits HK$17m

While it’s been a great week for DT Capital Limited (HKG:356) shareholders after stock gained 21%, they should consider it with a grain of salt. Although prices were relatively low, insiders chose to sell HK$17m worth of stock in the past 12 months. This could be a sign of impending weakness.

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.

Check out our latest analysis for DT Capital

The Last 12 Months Of Insider Transactions At DT Capital

The insider, Liu Junda, made the biggest insider sale in the last 12 months. That single transaction was for HK$5.6m worth of shares at a price of HK$0.08 each. So we know that an insider sold shares at around the present share price of HK$0.074. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern. The only individual insider seller over the last year was Liu Junda.

Liu Junda ditched 190.34m shares over the year. The average price per share was HK$0.091. 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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insiders At DT Capital Have Sold Stock Recently

The last three months saw significant insider selling at DT Capital. Specifically, insider Liu Junda ditched HK$9.7m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 24% of DT Capital shares, worth about HK$48m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The DT Capital Insider Transactions Indicate?

An insider hasn't bought DT Capital stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. While insiders do own shares, they don't own a heap, and they have been selling. We're in no rush to buy! While we like knowing 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. When we did our research, we found 4 warning signs for DT Capital (2 are a bit concerning!) 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 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.