44%of this DBS Group Holdings Ltd (SGX:D05) insider's holdings were sold in the last year

By
Simply Wall St
Published
February 16, 2022
SGX:D05
Source: Shutterstock

Insiders were net sellers of DBS Group Holdings Ltd's (SGX:D05 ) stock during the past year. That is, insiders sold more stock than they bought.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for DBS Group Holdings

DBS Group Holdings Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the CEO & Executive Director, Piyush Gupta, for S$2.7m worth of shares, at about S$29.80 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of S$36.80. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 44% of Piyush Gupta's holding. Piyush Gupta was the only individual insider to sell shares in the last twelve months.

Over the last year, we can see that insiders have bought 3.07k shares worth S$91k. But they sold 249.90k shares for S$7.7m. Piyush Gupta divested 249.90k shares over the last 12 months at an average price of S$30.87. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
SGX:D05 Insider Trading Volume February 16th 2022

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).

DBS Group Holdings Insiders Are Selling The Stock

The last three months saw significant insider selling at DBS Group Holdings. In total, CEO & Executive Director Piyush Gupta dumped S$1.6m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Does DBS Group Holdings Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. DBS Group Holdings insiders own about S$190m worth of shares (which is 0.2% of the company). 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 Does This Data Suggest About DBS Group Holdings Insiders?

An insider sold stock recently, but they haven't been buying. And our longer term analysis of insider transactions didn't bring confidence, either. On the plus side, DBS Group Holdings makes money, and is growing profits. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. 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. For example, DBS Group Holdings has 3 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.

But note: DBS Group Holdings 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, but not derivative transactions.

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