Insiders Rewarded With AU$1.4m Addition To Investment As BIR Financial Stock Hits AU$22m

Insiders who bought BIR Financial Limited (ASX:BIR) stock in the last 12 months were richly rewarded last week. The company's market value increased by AU$2.0m as a result of the stock's 10.0% gain over the same period. As a result, the stock they originally bought for AU$903k is now worth AU$2.3m.

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 BIR Financial

BIR Financial Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Phacharanad Monthanyanan bought AU$620k worth of shares at a price of AU$0.026 per share. We do like to see buying, but this purchase was made at well below the current 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.

Happily, we note that in the last year insiders paid AU$903k for 30.24m shares. But they sold 14.08m shares for AU$532k. In the last twelve months there was more buying than selling by BIR Financial insiders. They paid about AU$0.03 on average. We don't deny that it is nice to see insiders buying stock in the company. But we must note that the investments were made at well below 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!

BIR Financial is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

BIR Financial Insiders Bought Stock Recently

It's good to see that BIR Financial insiders have made notable investments in the company's shares. We can see that Director Robert Fogarty paid AU$256k for shares in the company. No-one sold. This makes one think the business has some good points.

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. BIR Financial insiders own 86% of the company, currently worth about AU$19m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The BIR Financial Insider Transactions Indicate?

It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about BIR Financial. One for the watchlist, at least! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing BIR Financial. Case in point: We've spotted 6 warning signs for BIR Financial you should be aware of, and 4 of these don't sit too well with us.

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.

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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.