Insider Stock Buyers At Bhagwan Marine Recouped Some Losses This Week

Some of the losses seen by insiders who purchased AU$705.2k worth of Bhagwan Marine Limited (ASX:BWN) shares over the past year were recovered after the stock increased by 12% over the past week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled AU$78k since the time of purchase.

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.

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The Last 12 Months Of Insider Transactions At Bhagwan Marine

Over the last year, we can see that the biggest insider purchase was by Founder Loui Kannikoski for AU$300k worth of shares, at about AU$0.51 per share. That means that an insider was happy to buy shares at above the current price of AU$0.51. 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. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Loui Kannikoski was the only individual insider to buy during the last year.

Loui Kannikoski bought a total of 1.24m shares over the year at an average price of AU$0.57. 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!

See our latest analysis for Bhagwan Marine

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

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. It's great to see that Bhagwan Marine insiders own 59% of the company, worth about AU$82m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Bhagwan Marine Tell Us?

It doesn't really mean much that no insider has traded Bhagwan Marine shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. With high insider ownership and encouraging transactions, it seems like Bhagwan Marine insiders think the business has merit. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Bhagwan Marine. While conducting our analysis, we found that Bhagwan Marine has 2 warning signs and it would be unwise to ignore them.

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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.