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 Bonterra Resources Inc. (CVE:BTR), 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, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Check out our latest analysis for Bonterra Resources
Bonterra Resources Insider Transactions Over The Last Year
Notably, that recent purchase by Executive Chairman of the Board Cesar Gonzalez was not the only time they bought Bonterra Resources shares this year. They previously made an even bigger purchase of CA$159k worth of shares at a price of CA$1.27 per share. That means that even when the share price was higher than CA$0.27 (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. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
While Bonterra Resources insiders bought shares during the last year, they didn't sell. They paid about CA$0.97 on average. This is nice to see since it implies that insiders might see value around current prices. You can see the insider transactions (by companies and 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 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 Bonterra Resources Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at Bonterra Resources. In total, insiders bought CA$129k worth of shares in that time, and we didn't record any sales whatsoever. That shows some optimism about the company's future.
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From what we can see in our data, insiders own only about CA$284k worth of Bonterra Resources shares. It's always possible we are missing something but from our data, it looks like insider ownership is minimal.
So What Does This Data Suggest About Bonterra Resources Insiders?
The recent insider purchases are 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. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Bonterra Resources insiders are expecting a bright future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that Bonterra Resources is showing 3 warning signs in our investment analysis, and 1 of those shouldn't be ignored...
Of course Bonterra Resources 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.
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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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