In the last year, multiple insiders have substantially increased their holdings of Digital Media Solutions, Inc. (NYSE:DMS) stock, indicating that insiders' optimism about the company's prospects has increased.
While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.
Digital Media Solutions Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Independent Director Lyndon Lea for US$53m worth of shares, at about US$9.49 per share. That means that an insider was happy to buy shares at above the current price of US$7.08. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. 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.
Digital Media Solutions insiders may have bought shares in the last year, but they didn't sell any. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Digital Media Solutions is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of Digital Media Solutions
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data indicates that Digital Media Solutions insiders own about US$6.0m worth of shares (which is 1.4% of the company). Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
So What Does This Data Suggest About Digital Media Solutions Insiders?
There haven't been any insider transactions in the last three months -- that doesn't mean much. But insiders have shown more of an appetite for the stock, over the last year. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Digital Media Solutions stock. 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. For example, Digital Media Solutions has 3 warning signs (and 1 which can't be ignored) we think you should know about.
But note: Digital Media Solutions 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.
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.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
