Did Breaker Resources NL (ASX:BRB) Insiders Buy Up More Shares?

It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Breaker Resources NL (ASX:BRB).

Do Insider Transactions Matter?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, most countries require that the company discloses such transactions to the market.

We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

Check out our latest analysis for Breaker Resources

Breaker Resources Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Executive Chairman of the Board Thomas Sanders for AU$78k worth of shares, at about AU$0.22 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.20). 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. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

Happily, we note that in the last year insiders paid AU$121k for 551.63k shares. But they sold 133.33k shares for AU$30k. In total, Breaker Resources insiders bought more than they sold over the last year. 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!

Breaker Resources is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Does Breaker Resources Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data indicates that Breaker Resources insiders own about AU$9.7m worth of shares (which is 15% of the company). But they may have an indirect interest through a corporate structure that we haven't picked up on. Whilst better than nothing, we're not overly impressed by these holdings.

So What Does This Data Suggest About Breaker Resources Insiders?

It doesn't really mean much that no insider has traded Breaker Resources shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Breaker Resources stock. While we like knowing 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. To that end, you should learn about the 6 warning signs we've spotted with Breaker Resources (including 3 which are significant).

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, but not derivative transactions.

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This article by Simply Wall St is general in nature. 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.
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