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Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Diaceutics PLC (LON:DXRX), that sends out a positive message to the company's shareholders.
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.
See our latest analysis for Diaceutics
The Last 12 Months Of Insider Transactions At Diaceutics
In the last twelve months, the biggest single purchase by an insider was when Senior Independent Director Graham Paterson bought UK£51k worth of shares at a price of UK£1.29 per share. That means that an insider was happy to buy shares at above the current price of UK£1.22. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
While Diaceutics insiders bought shares during the last year, they didn't sell. The average buy price was around UK£1.15. It's great to see insiders putting their own cash into the company's stock, albeit at below the recent share price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.
Does Diaceutics Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. It appears that Diaceutics insiders own 28% of the company, worth about UK£28m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Diaceutics Insiders?
There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. Overall we don't see anything to make us think Diaceutics insiders are doubting the company, and they do own shares. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Diaceutics.