With Bayan Mining and Minerals Up 22%, Insider Buyers Count Their Returns

Bayan Mining and Minerals Limited (ASX:BMM) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 22% resulting in a AU$4.9m addition to the company’s market value. Put another way, the original AU$163.2k acquisition is now worth AU$681.3k.

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.

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Bayan Mining and Minerals Insider Transactions Over The Last Year

The Executive Director Fadi Diab made the biggest insider purchase in the last 12 months. That single transaction was for AU$100k worth of shares at a price of AU$0.047 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.20. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

While Bayan Mining and Minerals insiders bought shares during the last year, they didn't sell. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

See our latest analysis for Bayan Mining and Minerals

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Does Bayan Mining and Minerals Boast High 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. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Bayan Mining and Minerals insiders own 40% of the company, worth about AU$11m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Bayan Mining and Minerals 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. It would be great to see more insider buying, but overall it seems like Bayan Mining and Minerals insiders are reasonably well aligned (owning significant chunk of the company's shares) 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. Every company has risks, and we've spotted 5 warning signs for Bayan Mining and Minerals (of which 4 make us uncomfortable!) you should know about.

But note: Bayan Mining and Minerals 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.