Insider Traders Lose US$160k As Bitfarms Drops

Insiders who acquired US$676.1k worth of Bitfarms Ltd.'s (TSE:BITF) stock at an average price of US$2.46 in the past 12 months may be dismayed by the recent 11% price decline. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth US$516.2k, which is not great.

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.

Check out our latest analysis for Bitfarms

Bitfarms Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when CEO & Director Benjamin Gagnon bought CA$242k worth of shares at a price of CA$2.42 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$1.88). 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.

Over the last year, we can see that insiders have bought 274.58k shares worth CA$676k. On the other hand they divested 49.67k shares, for CA$142k. In the last twelve months there was more buying than selling by Bitfarms insiders. 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 always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insiders At Bitfarms Have Bought Stock Recently

Over the last quarter, Bitfarms insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought CA$519k worth of shares. This could be interpreted as suggesting a positive outlook.

Does Bitfarms 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. I reckon it's a good sign if insiders own a significant number of shares in the company. From looking at our data, insiders own CA$1.9m worth of Bitfarms stock, about 0.2% of the company. We consider this fairly low insider ownership.

What Might The Insider Transactions At Bitfarms Tell Us?

It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Bitfarms 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've found that Bitfarms has 2 warning signs (1 makes us a bit uncomfortable!) that deserve your attention before going any further with your analysis.

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 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.