Insiders who acquired AU$142k worth of Balkan Mining and Minerals Limited’s (ASX:BMM) stock at an average price of AU$0.35 in the past 12 months may be dismayed by the recent 23% price decline. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth AU$69k which is not ideal.
Although we don’t think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
Balkan Mining and Minerals Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when insider Bilal Ahmad bought AU$140k worth of shares at a price of AU$0.66 per share. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.17). Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it’s very important to consider the price insiders pay for shares. 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.
In the last twelve months Balkan Mining and Minerals insiders were buying shares, but not selling. They paid about AU$0.35 on average. I’d consider this a positive as it suggests insiders see value at around the current price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Balkan Mining and Minerals 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.
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. Balkan Mining and Minerals insiders own about AU$1.9m worth of shares. That equates to 18% of the company. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Balkan Mining and Minerals Insider Transactions Indicate?
It doesn’t really mean much that no insider has traded Balkan Mining and Minerals 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 Balkan Mining and Minerals and their transactions don’t cause us concern. While we like knowing 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. To help with this, we’ve discovered 6 warning signs (5 are a bit unpleasant!) that you ought to be aware of before buying any shares in Balkan Mining and Minerals.
Of course Balkan Mining and Minerals may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
Source : Simplywall