Who Has Been Buying Digimarc Corporation (NASDAQ:DMRC) Shares?

It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Digimarc Corporation (NASDAQ:DMRC), you may well want to know whether insiders have been buying or selling.

What Is Insider Buying?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

View our latest analysis for Digimarc

Digimarc Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Riley Mccormack bought US$37m worth of shares at a price of US$14.37 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$35.99. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

In the last twelve months insiders purchased 2.55m shares for US$37m. But they sold 44.90k shares for US$2.2m. In total, Digimarc insiders bought more than they sold over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Digimarc Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Digimarc shares. In total, insiders dumped US$1.0m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

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. We usually like to see fairly high levels of insider ownership. Digimarc insiders own about US$151m worth of shares (which is 26% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Digimarc Insider Transactions Indicate?

Insiders sold stock recently, but they haven't been buying. But we take heart from prior transactions. We are also comforted by the high levels of insider ownership. So the recent selling doesn't worry us. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Digimarc. In terms of investment risks, we've identified 4 warning signs with Digimarc and understanding them should be part of your investment process.

Of course Digimarc 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, but not derivative transactions.

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This article by Simply Wall St is general in nature. 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.
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