While Digital Turbine, Inc. (NASDAQ:APPS) shareholders have had a good week with the stock up 13%, they shouldn't let their guards down. Even though stock prices were relatively low, insiders elected to sell US$2.4m worth of stock in the last year, which could indicate some expected downturn.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
Check out our latest analysis for Digital Turbine
Digital Turbine Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the CEO & Director, William Stone, for US$1.2m worth of shares, at about US$7.05 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$5.31. So it is hard to draw any strong conclusion from it.
Happily, we note that in the last year insiders paid US$838k for 109.12k shares. But they sold 298.71k shares for US$2.4m. In total, Digital Turbine insiders sold more than they bought over the last year. They sold for an average price of about US$7.87. Insider selling doesn't make us excited to buy. But we note that the selling, on average, was at well above the recently traded price of US$5.31. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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Insiders At Digital Turbine Have Sold Stock Recently
Over the last three months, we've seen notably more insider selling, than insider buying, at Digital Turbine. We note CEO & Director William Stone cashed in US$1.6m worth of shares. On the other hand we note insiders bought US$484k worth of shares. The share price has moved a bit recently, but it's hard to argue that the selling is a positive.
Insider Ownership Of Digital Turbine
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Digital Turbine insiders own 3.9% of the company, worth about US$21m. 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 Turbine Insiders?
The stark truth for Digital Turbine is that there has been more insider selling than insider buying in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. While insiders do own shares, they don't own a heap, and they have been selling. We're in no rush to buy! 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 Turbine has 2 warning signs we think you should be aware of.
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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.