Yahoo Finance Biome Australia Gains 23%, Insider Trades Reap Benefit
Biome Australia Limited (ASX:BIO) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 23% resulting in a AU$18m addition to the company’s market value. In other words, the original AU$75.0k purchase is now worth AU$368.0k.
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.
View our latest analysis for Biome Australia
Biome Australia Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by insider Richard Tegoni for AU$75k worth of shares, at about AU$0.096 per share. We do like to see buying, but this purchase was made at well below the current price of AU$0.46. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current 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!
There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).
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. It appears that Biome Australia insiders own 35% of the company, worth about AU$34m. 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 Do The Biome Australia Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Biome Australia shares in the last quarter. However, our analysis of transactions over the last year is heartening. Insiders own shares in Biome Australia and we see no evidence to suggest they are worried about the future. 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. To that end, you should learn about the 5 warning signs we've spotted with Biome Australia (including 2 which are a bit unpleasant).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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 of direct interests only, but not derivative transactions or indirect interests.
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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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
