Insider Spends AU$235k Buying More Shares In Beacon Minerals

Investors who take an interest in Beacon Minerals Limited (ASX:BCN) should definitely note that the Executive Chairman & MD, Graham McGarry, recently paid AU$0.028 per share to buy AU$235k worth of the stock. Although the purchase only increased their holding by 1.7%, it is still a solid purchase in our view.

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The Last 12 Months Of Insider Transactions At Beacon Minerals

Notably, that recent purchase by Graham McGarry is the biggest insider purchase of Beacon Minerals shares that we've seen in the last year. That means that even when the share price was higher than AU$0.027 (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. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Graham McGarry was the only individual insider to buy during the last year.

Graham McGarry bought 16.10m shares over the last 12 months at an average price of AU$0.027. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Check out our latest analysis for Beacon Minerals

Beacon Minerals is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership Of Beacon Minerals

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. It's great to see that Beacon Minerals insiders own 44% of the company, worth about AU$50m. 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 Beacon Minerals Insider Transactions Indicate?

It's certainly positive 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. When combined with notable insider ownership, these factors suggest Beacon Minerals insiders are well aligned, and quite possibly think the share price is too low. Nice! While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Case in point: We've spotted 2 warning signs for Beacon Minerals you should be aware of, and 1 of these is a bit unpleasant.

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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.