DT Midstream Insiders Sold US$2.3m Of Shares Suggesting Hesitancy

Over the past year, many DT Midstream, Inc. (NYSE:DTM) insiders sold a significant stake in the company which may have piqued investors' interest. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, if numerous insiders are selling, shareholders should investigate more.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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The Last 12 Months Of Insider Transactions At DT Midstream

The Executive VP, Wendy Ellis, made the biggest insider sale in the last 12 months. That single transaction was for US$1.8m worth of shares at a price of US$93.28 each. That means that even when the share price was below the current price of US$107, an insider wanted to cash in some shares. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was 75% of Wendy Ellis's stake.

Happily, we note that in the last year insiders paid US$168k for 2.09k shares. On the other hand they divested 23.61k shares, for US$2.3m. In total, DT Midstream insiders sold more than they bought over the last year. The sellers received a price of around US$95.33, on average. We don't gain confidence from insider selling below the recent share price. But we wouldn't put too much weight on the insider selling. 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!

View our latest analysis for DT Midstream

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Insiders At DT Midstream Have Sold Stock Recently

Over the last three months, we've seen notably more insider selling, than insider buying, at DT Midstream. In that time, Executive VP & Chief Administrative Officer Melissa Cox dumped US$497k worth of shares. On the flip side, Executive VP Jeffrey Jewell spent US$16k on purchasing shares. Because the selling vastly outweighs the buying, we'd say this is a somewhat bearish sign.

Does DT Midstream Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. DT Midstream insiders own about US$42m worth of shares. That equates to 0.4% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At DT Midstream Tell Us?

The insider sales have outweighed the insider buying, at DT Midstream, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. Insiders own shares, but we're still pretty cautious, given the history of sales. So we'd only buy after careful consideration. 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. While conducting our analysis, we found that DT Midstream has 1 warning sign and it would be unwise to ignore it.

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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.