Insider Buyers Lose AU$388k As Bowen Coking Coal Sheds AU$10.0m

Insiders who bought AU$648.0k worth of Bowen Coking Coal Limited's (ASX:BCB) stock at an average buy price of AU$0.017 over the last year may be disappointed by the recent 13% decrease in the stock. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth AU$259.8k, which is not what they expected.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Bowen Coking Coal

Bowen Coking Coal Insider Transactions Over The Last Year

Notably, that recent purchase by Executive Chairman Nicholas Jorss was not the only time they bought Bowen Coking Coal shares this year. Earlier in the year, they paid AU$0.067 per share in a AU$268k purchase. That means that even when the share price was higher than AU$0.007 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

In the last twelve months Bowen Coking Coal insiders were buying shares, but not selling. They paid about AU$0.017 on average. This is nice to see since it implies that insiders might see value around current prices. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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).

Insiders At Bowen Coking Coal Have Bought Stock Recently

Over the last quarter, Bowen Coking Coal insiders have spent a meaningful amount on shares. Overall, two insiders shelled out AU$280k for shares in the company -- and none sold. This is a positive in our book as it implies some confidence.

Insider Ownership Of Bowen Coking Coal

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. From looking at our data, insiders own AU$1.4m worth of Bowen Coking Coal stock, about 1.8% of the company. However, it's possible that insiders might have an indirect interest through a more complex structure. We consider this fairly low insider ownership.

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

It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Bowen Coking Coal insiders are reasonably well aligned, and optimistic for the future. 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. At Simply Wall St, we've found that Bowen Coking Coal has 3 warning signs (2 are potentially serious!) that deserve your attention before going any further with your analysis.

But note: Bowen Coking Coal 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.