Selling Digital Domain Holdings Shares at a Lower Price Than Current Market Value May Have Been a Costly Mistake for Insiders
Even though Digital Domain Holdings Limited (HKG:547) has fallen by 11% over the past week , insiders who sold HK$194m worth of stock over the past year have had less luck. Insiders might have been better off holding onto their shares, given that the average selling price of HK$0.32 is still below the current share price.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At Digital Domain Holdings
In the last twelve months, the biggest single sale by an insider was when the insider, Hoi See Song, sold HK$89m worth of shares at a price of HK$0.28 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of HK$0.24. So it may not tell us anything about how insiders feel about the current share price.
All up, insiders sold more shares in Digital Domain Holdings than they bought, over the last year. 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 Digital Domain Holdings
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Digital Domain Holdings Insiders Are Selling The Stock
The last three months saw significant insider selling at Digital Domain Holdings. In total, insider Hoi See Song dumped HK$89m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Insider Ownership Of Digital Domain Holdings
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. Insiders own 28% of Digital Domain Holdings shares, worth about HK$542m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Does This Data Suggest About Digital Domain Holdings Insiders?
An insider hasn't bought Digital Domain Holdings stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn't give us much comfort. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. At Simply Wall St, we found 2 warning signs for Digital Domain Holdings that deserve your attention before buying any shares.
Of course Digital Domain Holdings 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 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.