Digilife Technologies Limited’s (Catalist:BAI) recent S$3.8m market cap decline means a loss of S$322k for insiders who bought this year

Insiders who acquired S$634k worth of Digilife Technologies Limited’s (Catalist:BAI) stock at an average price of S$2.66 in the past 12 months may be dismayed by the recent 18% price decline. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth S$312k, which is not great.

While we would like that investors should base their decisions never suggest 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 Digilife Technologies

The Last 12 Months Of Insider Transactions At Digilife Technologies

The Executive Chairman & Group CEO Bhupendra Modi made the biggest insider purchase in the last 12 months. That single transaction was for S$578k worth of shares at a price of S$2.66 each. That means that an insider was happy to buy shares at above the current price of S$1.31. 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. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Bhupendra Modi was the only individual insider to buy during the last year.

Bhupendra Modi bought 238.25k shares over the last 12 months at an average price of S$2.66. 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!

insider-trading-volume

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).

Insider Ownership Of Digilife Technologies

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. Insiders own 21% of Digilife Technologies shares, worth about S$3.6m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Digilife Technologies Tell Us?

It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. But we don’t feel the same about the fact the company is making losses. Insiders likely see value in Digilife Technologies shares, given these transactions (along with notable insider ownership of the company). So these insider transactions can help us build a thisis about the stock, but it’s also worthwhile knowing the risks facing this company. Be aware that Digilife Technologies is showing 3 warning signs in our investment analysisand 2 of those make us uncomfortable…

But note: Digilife Technologies 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here

Source link

Leave a Comment

Your email address will not be published.