Quite a few insiders have dramatically grown their holdings in Booktopia Group Limited (ASX:BKG) over the past 12 months. An insider's optimism about the company's prospects is a positive sign.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for Booktopia Group
The Last 12 Months Of Insider Transactions At Booktopia Group
In the last twelve months, the biggest single purchase by an insider was when Co-Founder & Executive Director Antony Nash bought AU$6.1m worth of shares at a price of AU$1.75 per share. That means that an insider was happy to buy shares at above the current price of AU$0.26. 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. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels. Notably Antony Nash was also the biggest seller.
Happily, we note that in the last year insiders paid AU$11m for 18.25m shares. On the other hand they divested 4.04m shares, for AU$6.4m. In total, Booktopia Group insiders bought more than they sold over the last year. Their average price was about AU$0.58. I'd consider this a positive as it suggests insiders see value at around the current price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, 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.
Booktopia Group Insiders Bought Stock Recently
Over the last three months, we've seen significant insider buying at Booktopia Group. We can see that insider Nicholas Taylor paid AU$3.8m for shares in the company. No-one sold. This is a positive in our book as it implies some confidence.
Insider Ownership Of Booktopia Group
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Booktopia Group insiders own about AU$22m worth of shares (which is 62% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About Booktopia Group Insiders?
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. 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 Booktopia Group. One for the watchlist, at least! 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. Our analysis shows 2 warning signs for Booktopia Group (1 is a bit unpleasant!) and we strongly recommend you look at these before investing.
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.
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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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