Bullish insiders bet AU$878k on BikeExchange Limited (ASX:BEX)

Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of BikeExchange Limited (ASX:BEX), that sends out a positive message to the company's shareholders.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for BikeExchange

The Last 12 Months Of Insider Transactions At BikeExchange

In the last twelve months, the biggest single purchase by an insider was when Independent Non-Executive Director Dominic O'Hanlon bought AU$500k worth of shares at a price of AU$0.02 per share. That means that even when the share price was higher than AU$0.012 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. 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.

BikeExchange insiders may have bought shares in the last year, but they didn't sell any. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. 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.

Insiders At BikeExchange Have Bought Stock Recently

It's good to see that BikeExchange insiders have made notable investments in the company's shares. We can see that Non-Executive Director Andrew Ryan paid AU$250k for shares in the company. No-one sold. That shows some optimism about the company's future.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. BikeExchange insiders own about AU$2.3m worth of shares. That equates to 20% of the company. 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 Does This Data Suggest About BikeExchange Insiders?

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. When combined with notable insider ownership, these factors suggest BikeExchange insiders are well aligned, and that they may think the share price is too low. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing BikeExchange. Case in point: We've spotted 5 warning signs for BikeExchange you should be aware of, and 4 of them are a bit unpleasant.

But note: BikeExchange may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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