Should You Take Comfort From Insider Transactions At Bingo Industries Limited (ASX:BIN)?

It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Bingo Industries Limited (ASX:BIN), you may well want to know whether insiders have been buying or selling.

Do Insider Transactions Matter?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.

Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'

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Bingo Industries Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by MD, CEO & Executive Director Daniel Tartak for AU$72m worth of shares, at about AU$2.54 per share. So it's clear an insider wanted to buy, even at a higher price. Their view may have changed since then, but at least it shows they felt optimistic at the time. That purchase may suggest an expectation of positive returns over the long term.

Happily, we note that in the last year insiders bought 28.64m shares for a total of AU$73m. In the last twelve months there was more buying than selling by Bingo Industries insiders. Their average price was about AU$2.54. I'd consider this a positive as it suggests insiders see value at around the current price, which is AU$2.02. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Bingo Industries better if I see some big insider buys. While we wait, check out this freelist of growing companies with considerable, recent, insider buying.

Does Bingo Industries Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Bingo Industries insiders own 28% of the company, worth about AU$284m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Bingo Industries Tell Us?

The fact that there have been no Bingo Industries insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. It would be great to see more insider buying, but overall it seems like Bingo Industries insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. Therefore, you should should definitely take a look at this FREEreport showing analyst forecasts for Bingo Industries.

Of course Bingo Industries may not be the best stock to buy. So you may wish to see this freecollection of high quality companies.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.

Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.