Even if it's not a huge purchase, we think it was good to see that Jeffrey Royer, the Chairman of the Board of Baylin Technologies Inc. (TSE:BYL) recently shelled out CA$110k to buy stock, at CA$0.84 per share. Although the purchase is not a big one, by either a percentage standpoint or absolute value, it can be seen as a good sign.
The Last 12 Months Of Insider Transactions At Baylin Technologies
In fact, the recent purchase by Chairman of the Board Jeffrey Royer was not their only acquisition of 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. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$0.85). 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. 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.
In the last twelve months insiders purchased 770.58k shares for CA$968k. On the other hand they divested 40.77k shares, for CA$139k. In total, Baylin Technologies insiders bought more than they sold over the last year. The average buy price was around CA$1.26. These transactions suggest that insiders have considered the current price attractive. 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
For a common shareholder, it is worth checking how many shares are held by company 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 Baylin Technologies insiders own 51% of the company, worth about CA$18m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At Baylin Technologies Tell Us?
It is good to see recent purchasing. 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. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Baylin Technologies. 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. Every company has risks, and we've spotted 3 warning signs for Baylin Technologies you should know about.
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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