Keep An Eye On DT Capital As Insider Stock Selling Hits HK$9.7m

Last week, DT Capital Limited's (HKG:356) stock jumped 16%, but insiders who sold HK$9.7m worth of stock in over the past year are likely to be in a better position. Selling at an average price of HK$0.08, which is higher than the current price, may have been the best move for these insiders because their investment would have been worth less now than when they sold.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for DT Capital

The Last 12 Months Of Insider Transactions At DT Capital

Over the last year, we can see that the biggest insider sale was by the insider, Liu Junda, for HK$5.6m worth of shares, at about HK$0.08 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of HK$0.065. So it may not shed much light on insider confidence at current levels. Liu Junda was the only individual insider to sell shares in the last twelve months.

Liu Junda ditched 120.99m shares over the year. The average price per share was HK$0.08. The chart below shows insider transactions (by companies and individuals) over the last year. 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: Most of them are flying under the radar).

Insider Ownership Of DT Capital

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. DT Capital insiders own about HK$42m worth of shares. That equates to 24% of the company. 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 Do The DT Capital Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. Still, the insider transactions at DT Capital in the last 12 months are not very heartening. But we do like the fact that insiders own a fair chunk of the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing DT Capital. Every company has risks, and we've spotted 3 warning signs for DT Capital (of which 2 can't be ignored!) you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com