Blue Label Telecoms Stock Down 21% But Insiders Still In R11m Profit

Insiders who bought Blue Label Telecoms Limited (JSE:BLU) in the last 12 months may probably not pay attention to the stock's recent 21% drop. Even after accounting for the recent loss, the R7.68m worth of stock purchased by them is now worth R19.1m or in other words, their investment continues to give good returns.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

The Last 12 Months Of Insider Transactions At Blue Label Telecoms

In the last twelve months, the biggest single purchase by an insider was when Co-Founder Mark Levy bought R3.0m worth of shares at a price of R5.25 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of R13.08. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

In the last twelve months Blue Label Telecoms insiders were buying shares, but not selling. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

View our latest analysis for Blue Label Telecoms

Blue Label Telecoms 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. We usually like to see fairly high levels of insider ownership. Blue Label Telecoms insiders own 21% of the company, currently worth about R2.4b based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Blue Label Telecoms Insider Transactions Indicate?

The fact that there have been no Blue Label Telecoms insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. With high insider ownership and encouraging transactions, it seems like Blue Label Telecoms insiders think the business has merit. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Blue Label Telecoms. You'd be interested to know, that we found 2 warning signs for Blue Label Telecoms and we suggest you have a look.

Of course Blue Label Telecoms 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.

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

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.