Bellavista Resources Insiders Land Bargain With Gains Of AU$470k

Insiders who purchased Bellavista Resources Limited (ASX:BVR) shares in the past 12 months are unlikely to be deeply impacted by the stock's 13% decline over the past week. Reason being, despite the recent loss, insiders original purchase value of AU$917.1k is now worth AU$1.39m.

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

Our free stock report includes 4 warning signs investors should be aware of before investing in Bellavista Resources. Read for free now.

Bellavista Resources Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by insider Stephen Parsons for AU$579k worth of shares, at about AU$0.38 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.30). 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.

While Bellavista Resources insiders bought shares during the last year, they didn't sell. Their average price was about AU$0.20. We don't deny that it is nice to see insiders buying stock in the company. But we must note that the investments were made at well below today's share price. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

See our latest analysis for Bellavista Resources

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.

Insiders At Bellavista Resources Have Bought Stock Recently

It's good to see that Bellavista Resources insiders have made notable investments in the company's shares. Not only was there no selling that we can see, but they collectively bought AU$159k worth of shares. This makes one think the business has some good points.

Insider Ownership Of Bellavista Resources

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Bellavista Resources insiders own about AU$11m worth of shares. That equates to 36% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Bellavista Resources Insider Transactions Indicate?

It is good to see recent purchasing. 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. When combined with notable insider ownership, these factors suggest Bellavista Resources insiders are well aligned, and that they may think the share price is too low. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Bellavista Resources. At Simply Wall St, we've found that Bellavista Resources has 4 warning signs (2 are potentially serious!) that deserve your attention before going any further with your analysis.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.