Yahoo Finance Should You Be Worried About Insider Transactions At BIR Financial Limited (ASX:BIR)?
It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we’ll take a look at whether insiders have been buying or selling shares in BIR Financial Limited (ASX:BIR).
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, rules govern insider transactions, and certain disclosures are required.
We don’t think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Colombia 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’.
Check out our latest analysis for BIR Financial
The Last 12 Months Of Insider Transactions At BIR Financial
Non-Executive Chairman Tai Silberman made the biggest insider purchase in the last 12 months. That single transaction was for AU$174k worth of shares at a price of AU$0.21 each. That means that an insider was happy to buy shares at above the current price. 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. That purchase may suggest an expectation of positive returns over the long term. Tai Silberman was the only individual insider to buy over the year.
In total, BIR Financial insiders sold more than they bought over the last year. They sold for an average price of about AU$0.0036. We don’t gain much confidence from insider selling near the recent share price. But we don’t put too much weight on the insider selling, since sellers could have personal reasons. The chart below shows insider transactions 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!
I will like BIR Financial better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insider Ownership
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. It’s great to see that BIR Financial insiders own 84% of the company, worth about AU$12m. 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 BIR Financial Insider Transactions Indicate?
It doesn’t really mean much that no insider has traded BIR Financial shares in the last quarter. While we feel good about high insider ownership of BIR Financial, we can’t say the same about the selling of shares. I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
Of course BIR Financial may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
