Bill Identity Limited's (ASX:BID) recent AU$1.9m market cap decline means a loss of AU$332k for insiders who bought this year

By
Simply Wall St
Published
April 10, 2022
ASX:BID
Source: Shutterstock

The recent price decline of 12% in Bill Identity Limited's (ASX:BID) stock may have disappointed insiders who bought AU$434k worth of shares at an average price of AU$0.49 in the past 12 months. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth AU$102k, which is not what they expected.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Bill Identity

Bill Identity Insider Transactions Over The Last Year

The Independent Non-Executive Director David Hancock made the biggest insider purchase in the last 12 months. That single transaction was for AU$101k worth of shares at a price of AU$0.74 each. That means that an insider was happy to buy shares at above the current price of AU$0.12. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

In the last twelve months Bill Identity insiders were buying shares, but not selling. They paid about AU$0.49 on average. I'd consider this a positive as it suggests insiders see value at around the current price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
ASX:BID Insider Trading Volume April 10th 2022

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

Have Bill Identity Insiders Traded Recently?

There was some insider buying at Bill Identity over the last quarter. Non-Executive Chairman Peter Tonagh bought AU$9.8k worth of shares in that time. We like it when there are only buyers, and no sellers. But the amount invested in the last three months isn't enough for us too put much weight on it, as a single factor.

Insider Ownership of Bill Identity

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. We usually like to see fairly high levels of insider ownership. Based on our data, Bill Identity insiders have about 4.5% of the stock, worth approximately AU$1.1m. But they may have an indirect interest through a corporate structure that we haven't picked up on. We prefer to see high levels of insider ownership.

What Might The Insider Transactions At Bill Identity Tell Us?

Our data shows a little insider buying, but no selling, in the last three months. The net investment is not enough to encourage us much. 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 Bill Identity 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. For instance, we've identified 5 warning signs for Bill Identity (1 shouldn't be ignored) you should be aware of.

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, but not derivative transactions.

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