Bluechiip Insider Purchases Yet To Pay Off Regardless Of Recent Strength

Insiders who purchased AU$452.3k worth of Bluechiip Limited (ASX:BCT) shares over the past year recouped some of their losses after price gained 25% last week. However, the purchase is proving to be an expensive wager as insiders are yet to get ahead of their losses which currently stand at AU$224k since the time of purchase.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Bluechiip

Bluechiip Insider Transactions Over The Last Year

The Independent Non-Executive Chairman Iain MacGregor Kirkwood made the biggest insider purchase in the last 12 months. That single transaction was for AU$171k worth of shares at a price of AU$0.007 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.005). Their view may have changed since then, but at least it shows they felt optimistic at the time. 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.

While Bluechiip insiders bought shares during the last year, they didn't sell. They paid about AU$0.0099 on average. This is nice to see since it implies that insiders might see value around current prices. 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!

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.

Does Bluechiip Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Our data indicates that Bluechiip insiders own about AU$628k worth of shares (which is 11% of the company). 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 Bluechiip Tell Us?

It doesn't really mean much that no insider has traded Bluechiip shares in the last quarter. However, our analysis of transactions over the last year is heartening. We'd like to see bigger individual holdings. However, we don't see anything to make us think Bluechiip insiders are doubting the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Bluechiip. For instance, we've identified 5 warning signs for Bluechiip (4 shouldn't be ignored) you should be aware of.

Of course Bluechiip 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.

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