BlackWall's Recent Gains Improve Losses On Insider Purchases Worth AU$14.1m

Some of the losses seen by insiders who purchased AU$14.1m worth of BlackWall Limited (ASX:BWF) shares over the past year were recovered after the stock increased by 11% over the past week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled AU$9.3m since the time of purchase.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for BlackWall

The Last 12 Months Of Insider Transactions At BlackWall

The Non-Executive Director Richard Hill made the biggest insider purchase in the last 12 months. That single transaction was for AU$14m worth of shares at a price of AU$1.16 each. That means that even when the share price was higher than AU$0.39 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

In the last twelve months insiders purchased 12.18m shares for AU$14m. But they sold 88.33k shares for AU$39k. Overall, BlackWall insiders were net buyers during the last year. You can see the insider transactions (by companies and 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!

BlackWall is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insider Ownership Of BlackWall

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. BlackWall insiders own about AU$30m worth of shares (which is 45% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About BlackWall Insiders?

It doesn't really mean much that no insider has traded BlackWall shares in the last quarter. However, our analysis of transactions over the last year is heartening. With high insider ownership and encouraging transactions, it seems like BlackWall insiders think the business has merit. 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 help with this, we've discovered 6 warning signs (2 are a bit unpleasant!) that you ought to be aware of before buying any shares in BlackWall.

But note: BlackWall may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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 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.