Last week, DXC Technology Company’s (NYSE:DXC) stock jumped 3.3%, but insiders who sold US$923k worth of stock in over the past year are likely to be in a better position. Selling at an average price of US$29.89, which is higher than the current price, may have been the best move for these insiders because their investment would have been worth less now than when they sold.
Although we don’t think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
Check out the opportunities and risks within the US IT industry.
DXC Technology Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Executive VP & General Counsel, William Deckelman, for US$495k worth of shares, at about US$28.71 per share. That means that even when the share price was below the current price of US$29.54, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can’t be sure if it does mean insiders think the shares are fully valued, so it’s only a weak sign. It is worth noting that this sale was only 21% of William Deckelman’s holding.
Insiders in DXC Technology didn’t buy any shares in the last year. You can see a visual description of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
DXC Technology Insiders Are Selling The Stock
The last quarter saw substantial insider selling of DXC Technology shares. Specifically, insiders ditched US$789k 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.
Does DXC Technology Boast High Insider Ownership?
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 incentivized to build the company for the long term. It appears that DXC Technology insiders own 0.5% of the company, worth about US$33m. 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 Do The DXC Technology Insider Transactions Indicate?
Insiders haven’t bought DXC Technology stock in the last three months, but there was some selling. And even if we look at the last year, we didn’t see any purchases. But since DXC Technology is profitable and growing, we’re not too worried by this. While insiders do own shares, they don’t own a heap, and they have been selling. So we’d only buy after careful consideration. While we like knowing 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. You’d be interested to know, that we found 1 warning sign for DXC Technology and we suggest you have a look.
But note: DXC Technology 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.
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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.