Insiders Buying Biome Australia Might Wish They Invested More, Stock Gains 23%

Biome Australia Limited (ASX:BIO) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 23%, resulting in a AU$18m rise in the company's market capitalisation, translating to a gain of 391% on their initial investment. As a result, the stock they originally bought for AU$75.0k is now worth AU$368.0k.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Biome Australia

Biome Australia Insider Transactions Over The Last Year

The insider Richard Tegoni made the biggest insider purchase in the last 12 months. That single transaction was for AU$75k worth of shares at a price of AU$0.096 each. Even though the purchase was made at a significantly lower price than the recent price (AU$0.46), we still think insider buying is a positive. 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. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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).

Does Biome Australia Boast High 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Biome Australia insiders own about AU$34m worth of shares. That equates to 35% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Biome Australia Tell Us?

It doesn't really mean much that no insider has traded Biome Australia shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Biome Australia and their transactions don't cause us concern. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example, Biome Australia has 5 warning signs (and 2 which are a bit concerning) we think you should know about.

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 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