Have Insiders Been Selling Bill Identity Limited (ASX:BID) Shares?

We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Bill Identity Limited (ASX:BID), you may well want to know whether insiders have been buying or selling.

What Is Insider Selling?

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, rules govern insider transactions, and certain disclosures are required.

We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

See our latest analysis for Bill Identity

Bill Identity Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Founder & CTO, Anthony Du Preez, sold AU$1.4m worth of shares at a price of AU$1.05 per share. That means that even when the share price was below the current price of AU$1.11, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 20% of Anthony Du Preez's stake. Anthony Du Preez was the only individual insider to sell over the last year.

In the last twelve months insiders purchased 602.60k shares for AU$520k. But insiders sold 1.33m shares worth AU$1.4m. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insiders at Bill Identity Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at Bill Identity. We can see that Non-Executive Director David Hancock paid AU$500k for shares in the company. No-one sold. This could be interpreted as suggesting a positive outlook.

Does Bill Identity Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Bill Identity insiders own about AU$17m worth of shares. That equates to 9.2% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Bill Identity Tell Us?

The recent insider purchase is heartening. But we can't say the same for the transactions over the last 12 months. We don't take much heart from transactions by Bill Identity insiders over the last year. But they own a reasonable amount of the company, and there was some buying recently. So they seem pretty well aligned, overall. 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. While conducting our analysis, we found that Bill Identity has 1 warning sign and it would be unwise to ignore it.

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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