Dome Energy AB (publ) (STO:DOME) up 10%, but insiders miss out having sold stock earlier this year

By
Simply Wall St
Published
November 18, 2021
OM:REATO
Source: Shutterstock

While Dome Energy AB (publ) (STO:DOME) shareholders have had a good week with the stock up 10%, they shouldn't let their guards down. In spite of the relatively cheap prices, insiders made the decision to sell kr705k worth of stock in the last 12 months. This could be a warning indicator of vulnerabilities in the future.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Dome Energy

Dome Energy Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the CEO, President & Director, Paul Mörch, sold kr705k worth of shares at a price of kr3.00 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of kr3.29. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was 100% of Paul Mörch's holding. Paul Mörch was the only individual insider to sell shares in the last twelve months.

The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
OM:DOME Insider Trading Volume November 19th 2021

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insider Ownership

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. It appears that Dome Energy insiders own 22% of the company, worth about kr5.4m. 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 Does This Data Suggest About Dome Energy Insiders?

It doesn't really mean much that no insider has traded Dome Energy shares in the last quarter. We don't take much encouragement from the transactions by Dome Energy insiders. The modest level of insider ownership is, at least, some comfort. 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. At Simply Wall St, we've found that Dome Energy has 5 warning signs (4 are a bit concerning!) that deserve your attention before going any further with your analysis.

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, but not derivative transactions.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.