GBM Resources Up 22%, Insider Buyers Are Up 13%

Insiders who bought GBM Resources Limited (ASX:GBZ) stock in the last 12 months were richly rewarded last week. The company's market value increased by AU$2.3m as a result of the stock's 22% gain over the same period. As a result, the stock they originally bought for AU$1.06m is now worth AU$1.20m.

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.

View our latest analysis for GBM Resources

GBM Resources Insider Transactions Over The Last Year

The insider Michael Piperoglou made the biggest insider purchase in the last 12 months. That single transaction was for AU$500k worth of shares at a price of AU$0.009 each. Even though the purchase was made at a significantly lower price than the recent price (AU$0.011), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

While GBM Resources 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. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

GBM Resources is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Does GBM Resources Boast High Insider Ownership?

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. From our data, it seems that GBM Resources insiders own 14% of the company, worth about AU$1.8m. 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.

What Might The Insider Transactions At GBM Resources 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. While we have no worries about the insider transactions, we'd be more comfortable if they owned more GBM Resources stock. 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. At Simply Wall St, we found 4 warning signs for GBM Resources that deserve your attention before buying any shares.

But note: GBM Resources 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com