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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 BMG Resources Limited's (ASX:BMG) 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, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Check out our latest analysis for BMG Resources
BMG Resources Insider Transactions Over The Last Year
The Non-Executive Director John Dawson made the biggest insider purchase in the last 12 months. That single transaction was for AU$102k worth of shares at a price of AU$0.013 each. That means that an insider was happy to buy shares at around the current price of AU$0.013. 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. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. The good news for BMG Resources share holders is that insiders were buying at near the current price.
In the last twelve months BMG Resources 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. By clicking on the graph below, you can see the precise details of each insider transaction!
BMG Resources is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. BMG Resources insiders own about AU$3.1m worth of shares. That equates to 37% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At BMG Resources Tell Us?
It doesn't really mean much that no insider has traded BMG Resources shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in BMG Resources and their transactions don't cause us concern. 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. You'd be interested to know, that we found 6 warning signs for BMG Resources and we suggest you have a look.