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We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell BidEnergy Limited (ASX:BID), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
See our latest analysis for BidEnergy
The Last 12 Months Of Insider Transactions At BidEnergy
In the last twelve months, the biggest single sale by an insider was when the , James Baillieu, sold AU$948k worth of shares at a price of AU$1.10 per share. While we don't usually like to see insider selling, it's more concerning if the sales take price at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is AU$0.70. So it may not tell us anything about how insiders feel about the current share price. The only individual insider seller over the last year was James Baillieu. Notably James Baillieu was also the biggest buyer, having purchased AU$1.0m worth of shares.
Happily, we note that in the last year insiders paid AU$1.0m for 1.7m shares. But insiders sold 942k shares worth AU$948k. Overall, BidEnergy insiders were net buyers last year. The average buy price was around AU$0.60. These transactions show that insiders have confidence to invest their own money in the stock, albeit at slightly below the recent price. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).