GBM Resources Insiders Lose Out As Stock Sinks To AU$0.008

The recent 11% drop in GBM Resources Limited's (ASX:GBZ) stock could come as a blow to insiders who purchased AU$444.7k worth of stock at an average buy price of AU$0.009 over the past 12 months. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth AU$395.2k, which is not great.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for GBM Resources

GBM Resources Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by MD, CEO & Executive Director Peter Rohner for AU$395k worth of shares, at about AU$0.009 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.008). Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

GBM Resources insiders may have bought shares in the last year, but they didn't sell any. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

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).

Insider Ownership Of GBM Resources

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that GBM Resources insiders own 16% of the company, worth about AU$1.5m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About GBM Resources Insiders?

It doesn't really mean much that no insider has traded GBM Resources shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in GBM Resources and we see no evidence to suggest they are worried about 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. For example - GBM Resources has 5 warning signs we think you should be aware of.

Of course GBM Resources may not be the best stock to buy. So you may wish to see this free collection of high quality 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.