Selling DT Capital Shares at a Lower Price Than Current Market Value May Have Been a Costly Mistake for Insiders

DT Capital Limited's (HKG:356) value has fallen 13% in the last week, but insiders who sold HK$12m worth of stock over the last year have had less success. Insiders would probably have been better off holding on to their shares given that the average selling price of HK$0.083 is still lower than the current share price.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for DT Capital

DT Capital Insider Transactions Over The Last Year

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. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of HK$0.046. So it may not tell us anything about how insiders feel about the current share price. The only individual insider seller over the last year was Liu Junda.

Liu Junda divested 148.34m shares over the last 12 months at an average price of HK$0.083. 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: insiders have been buying them).

Insider Ownership Of DT Capital

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. DT Capital insiders own about HK$30m 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 Does This Data Suggest About DT Capital Insiders?

The fact that there have been no DT Capital insider transactions recently certainly doesn't bother us. Still, the insider transactions at DT Capital in the last 12 months are not very heartening. The modest level of insider ownership is, at least, some comfort. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we've found that DT Capital has 3 warning signs (1 makes us a bit uncomfortable!) that deserve your attention before going any further with your analysis.

But note: DT Capital may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.