Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Balkan Mining and Minerals Limited (ASX:BMM), it sends a favourable message to the company's shareholders.
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.
View our latest analysis for Balkan Mining and Minerals
The Last 12 Months Of Insider Transactions At Balkan Mining and Minerals
Over the last year, we can see that the biggest insider purchase was by insider Sufian Ahmad for AU$476k worth of shares, at about AU$0.43 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.33). It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Balkan Mining and Minerals insiders may have bought shares in the last year, but they didn't sell any. Their average price was about AU$0.24. We don't deny that it is nice to see insiders buying stock in the company. But we must note that the investments were made at well below today's share price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insiders At Balkan Mining and Minerals Have Bought Stock Recently
Over the last quarter, Balkan Mining and Minerals insiders have spent a meaningful amount on shares. insider Bilal Ahmad spent AU$140k on stock, and there wasn't any selling. That shows some optimism about the company's future.
Does Balkan Mining and Minerals Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 20% of Balkan Mining and Minerals shares, worth about AU$3.8m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Balkan Mining and Minerals Tell Us?
It's certainly positive to see the recent insider purchase. 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. When combined with notable insider ownership, these factors suggest Balkan Mining and Minerals insiders are well aligned, and that they may think the share price is too low. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example, Balkan Mining and Minerals has 4 warning signs (and 1 which shouldn't be ignored) we think you should know about.