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Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of BCI Minerals Limited (ASX:BCI), that sends out a positive message to the company's shareholders.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
View our latest analysis for BCI Minerals
The Last 12 Months Of Insider Transactions At BCI Minerals
The Non-Executive Chairman Brian O'Donnell made the biggest insider purchase in the last 12 months. That single transaction was for AU$266k worth of shares at a price of AU$0.25 each. So it's clear an insider wanted to buy, at around the current price, which is AU$0.27. 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. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for BCI Minerals share holders is that insiders were buying at near the current price.
In the last twelve months BCI Minerals insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insiders At BCI Minerals Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at BCI Minerals. Overall, two insiders shelled out AU$143k for shares in the company -- and none sold. This is a positive in our book as it implies some confidence.
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. From our data, it seems that BCI Minerals insiders own 1.5% of the company, worth about AU$12m. However, it's possible that insiders might have an indirect interest through a more complex structure. Whilst better than nothing, we're not overly impressed by these holdings.
So What Do The BCI Minerals Insider Transactions Indicate?
It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Given that insiders also own a fair bit of BCI Minerals we think they are probably pretty confident of a bright future. 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. Our analysis shows 3 warning signs for BCI Minerals (2 are a bit unpleasant!) and we strongly recommend you look at these before investing.