Insiders Could Have Profited By Holding onto Digital Turbine Shares Despite 15% Drop

Despite the fact that Digital Turbine, Inc.'s (NASDAQ:APPS) value has dropped 15% in the last week insiders who sold US$1.6m worth of stock in the past 12 months have had less success. Insiders would probably have been better off holding on to their shares given that the average selling price of US$7.04 is still lower than the current share price.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Digital Turbine

Digital Turbine Insider Transactions Over The Last Year

The CEO & Director, William Stone, made the biggest insider sale in the last 12 months. That single transaction was for US$1.2m worth of shares at a price of US$7.05 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of US$2.19. So it is hard to draw any strong conclusion from it.

Over the last year, we can see that insiders have bought 84.12k shares worth US$588k. But they sold 225.21k shares for US$1.6m. All up, insiders sold more shares in Digital Turbine than they bought, over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like Digital Turbine 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.

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. A high insider ownership often makes company leadership more mindful of shareholder interests. From our data, it seems that Digital Turbine insiders own 3.9% of the company, worth about US$9.3m. Whilst better than nothing, we're not overly impressed by these holdings.

So What Do The Digital Turbine Insider Transactions Indicate?

The fact that there have been no Digital Turbine insider transactions recently certainly doesn't bother us. The insider transactions at Digital Turbine are not inspiring us to buy. And we're not picking up on high enough insider ownership to give us any comfort. 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. You'd be interested to know, that we found 2 warning signs for Digital Turbine and we suggest you have a look.

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 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.