Investors who take an interest in Baylin Technologies Inc. (TSE:BYL) should definitely note that the Chairman of the Board, Jeffrey Royer, recently paid CA$0.93 per share to buy CA$282k worth of the stock. Although the purchase only increased their holding by 1.5%, it is still a solid purchase in our view.
The Last 12 Months Of Insider Transactions At Baylin Technologies
Notably, that recent purchase by Chairman of the Board Jeffrey Royer was not the only time they bought Baylin Technologies shares this year. They previously made an even bigger purchase of CA$451k worth of shares at a price of CA$2.25 per share. That means that an insider was happy to buy shares at above the current price of CA$1.03. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
Happily, we note that in the last year insiders paid CA$858k for 640.08k shares. On the other hand they divested 40765 shares, for CA$139k. In the last twelve months there was more buying than selling by Baylin Technologies insiders. They paid about CA$1.34 on average. These transactions suggest that insiders have considered the current price attractive. You can see the insider transactions (by 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!
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).
Insider Ownership of Baylin Technologies
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. Baylin Technologies insiders own 50% of the company, currently worth about CA$21m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About Baylin Technologies Insiders?
It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Baylin Technologies insiders are well aligned, and quite possibly think the share price is too low. Nice! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - Baylin Technologies has 3 warning signs we think you should be aware of.
Of course Baylin Technologies 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, but not derivative transactions.
This article by Simply Wall St is general in nature. 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.
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