De'Longhi Insiders Sell €3.0m Of Stock, Possibly Signalling Caution

In the last year, many De'Longhi S.p.A. (BIT:DLG) insiders sold a substantial stake in the company which may have sparked shareholders' attention. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

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 De'Longhi

De'Longhi Insider Transactions Over The Last Year

The Vice Chairman & CEO, Fabio de' Longhi, made the biggest insider sale in the last 12 months. That single transaction was for €987k worth of shares at a price of €33.31 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 silver lining is that this sell-down took place above the latest price (€30.20). So it may not tell us anything about how insiders feel about the current share price.

Insiders in De'Longhi didn't buy any shares in the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like De'Longhi better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

De'Longhi Insiders Are Selling The Stock

The last quarter saw substantial insider selling of De'Longhi shares. In total, Vice Chairman & CEO Fabio de' Longhi dumped €222k 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. We usually like to see fairly high levels of insider ownership. It's great to see that De'Longhi insiders own 54% of the company, worth about €2.4b. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The De'Longhi Insider Transactions Indicate?

An insider hasn't bought De'Longhi stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. But since De'Longhi is profitable and growing, we're not too worried by this. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. 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. For example - De'Longhi has 1 warning sign we think you should be aware of.

Of course De'Longhi 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.