Even if it's not a huge purchase, we think it was good to see that Geoffrey Lord, a Babylon Pump & Power Limited (ASX:BPP) insider, recently shelled out AU$66k to buy stock, at AU$0.017 per share. However, it only increased shares held by 2.4%, and it wasn't a huge purchase by absolute value, either.
Babylon Pump & Power Insider Transactions Over The Last Year
Notably, that recent purchase by insider Geoffrey Lord was not the only time they bought Babylon Pump & Power shares this year. They previously made an even bigger purchase of AU$465k worth of shares at a price of AU$0.015 per share. That means that an insider was happy to buy shares at around the current price of AU$0.017. 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. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. Happily, the Babylon Pump & Power insiders decided to buy shares at close to current prices.
In the last twelve months Babylon Pump & Power insiders were buying shares, but not selling. 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!
Babylon Pump & Power is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 30% of Babylon Pump & Power shares, worth about AU$4.2m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Babylon Pump & Power Insider Transactions Indicate?
The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Insiders likely see value in Babylon Pump & Power shares, given these transactions (along with notable insider ownership of the company). 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. When we did our research, we found 5 warning signs for Babylon Pump & Power (4 can't be ignored!) that we believe deserve your full attention.
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, but not derivative transactions.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned.
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