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When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Boom Logistics Limited's (ASX:BOL) instance, it's good news for shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
Check out our latest analysis for Boom Logistics
Boom Logistics Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Independent Non-Executive Director Damian Banks for AU$203k worth of shares, at about AU$0.15 per share. That means that even when the share price was higher than AU$0.14 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
In the last twelve months Boom Logistics insiders were buying shares, but not selling. The average buy price was around AU$0.13. These transactions show that insiders have confidence to invest their own money in the stock, albeit at slightly below the recent price. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Boom Logistics 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.
Insiders At Boom Logistics Have Bought Stock Recently
There was some insider buying at Boom Logistics over the last quarter. Independent Non-Executive Director Damian Banks bought AU$23k worth of shares in that time. It's great to see that insiders are only buying, not selling. But the amount invested in the last three months isn't enough for us too put much weight on it, as a single factor.
Insider Ownership
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Based on our data, Boom Logistics insiders have about 3.5% of the stock, worth approximately AU$2.0m. But they may have an indirect interest through a corporate structure that we haven't picked up on. We consider this fairly low insider ownership.