Don't Ignore The Insider Selling In Domo

DOMO, INC. +2.57%

DOMO, INC.

DOMO

7.38

+2.57%

Some Domo, Inc. (NASDAQ:DOMO) shareholders may be a little concerned to see that the Founder, Joshua James, recently sold a substantial US$1.0m worth of stock at a price of US$9.38 per share. However, that sale only accounted for 7.3% of their holding, so arguably it doesn't say much about their conviction.

View our latest analysis for Domo

Domo Insider Transactions Over The Last Year

Notably, that recent sale by Founder Joshua James was not the only time they traded Domo shares this year. They previously purchased US$4.3m worth of shares at a price of US$14.19 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$8.92). Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Notably Joshua James was also the biggest seller.

In the last twelve months insiders purchased 521.61k shares for US$7.2m. On the other hand they divested 197.74k shares, for US$1.9m. In total, Domo insiders bought more than they sold over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
NasdaqGM:DOMO Insider Trading Volume March 29th 2024

Domo is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does Domo 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. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Domo insiders own 16% of the company, worth about US$54m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Domo Insiders?

Insiders haven't bought Domo stock in the last three months, but there was some selling. But we take heart from prior transactions. We like that insiders own a fair amount of the company. So the recent selling doesn't worry us too much. 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. At Simply Wall St, we've found that Domo has 4 warning signs (1 shouldn't be ignored!) that deserve your attention before going any further with your analysis.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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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