Bowen Coking Coal Insiders Lose Out As Stock Sinks To AU$0.40

The recent 20% drop in Bowen Coking Coal Limited's (ASX:BCB) stock could come as a blow to insiders who purchased AU$280.0k worth of stock at an average buy price of AU$0.90 over the past 12 months. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only AU$124.4k.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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The Last 12 Months Of Insider Transactions At Bowen Coking Coal

The Non-Executive Director Nicholas Jorss made the biggest insider purchase in the last 12 months. That single transaction was for AU$250k worth of shares at a price of AU$0.90 each. That means that an insider was happy to buy shares at above the current price of AU$0.40. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

In the last twelve months Bowen Coking Coal insiders were buying shares, but not selling. 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!

Check out our latest analysis for Bowen Coking Coal

Bowen Coking Coal 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

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. Our data suggests Bowen Coking Coal insiders own 2.0% of the company, worth about AU$8.7k. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. We prefer to see high levels of insider ownership.

What Might The Insider Transactions At Bowen Coking Coal Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Bowen Coking Coal stock. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 4 warning signs for Bowen Coking Coal (of which 3 can't be ignored!) you should know about.

Of course Bowen Coking Coal may not be the best stock to buy. So you may wish to see this free collection of high quality 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.