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Despite Biome Australia Limited's recent decline, insiders have made a around AU$1.8m profit after buying earlier this year.

·3-min read

Insiders who bought Biome Australia Limited (ASX:BIO) stock lover the last 12 months are probably not as affected by last week’s 13% loss. After taking the recent loss into consideration, the AU$314k worth of stock they bought is now worth AU$2.1m, indicating that their investment yielded a positive return.

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.

See our latest analysis for Biome Australia

The Last 12 Months Of Insider Transactions At Biome Australia

In the last twelve months, the biggest single purchase by an insider was when Chief Financial Officer Douglas Loh bought AU$219k worth of shares at a price of AU$0.059 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.077. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

In the last twelve months Biome Australia insiders were buying shares, but not selling. They paid about AU$0.012 on average. It is certainly positive to see that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share 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!

insider-trading-volume
insider-trading-volume

Biome Australia 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.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Biome Australia insiders own 31% of the company, worth about AU$4.8m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Biome Australia Insiders?

It doesn't really mean much that no insider has traded Biome Australia 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 Biome Australia and their transactions don't cause us concern. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Biome Australia. At Simply Wall St, we found 4 warning signs for Biome Australia that deserve your attention before buying any shares.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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