Insiders Find Solace Selling AU$7.3m In Stock With Boom Logistics' Price Down 13%

By selling AU$7.3m worth of Boom Logistics Limited (ASX:BOL) stock at an average sell price of AU$1.78 over the last year, insiders seemed to have made the most of their holdings. The company's market valuation decreased by AU$11m after the stock price dropped 13% over the past week, but insiders were spared from painful losses.

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.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

The Last 12 Months Of Insider Transactions At Boom Logistics

Over the last year, we can see that the biggest insider sale was by the insider, Stephen Grove, for AU$5.0m worth of shares, at about AU$1.78 per share. That means that even when the share price was below the current price of AU$2.15, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was 100% of Stephen Grove's stake. The only individual insider seller over the last year was Stephen Grove.

Over the last year, we can see that insiders have bought 30.00k shares worth AU$59k. But insiders sold 4.08m shares worth AU$7.3m. Stephen Grove ditched 4.08m shares over the year. The average price per share was AU$1.78. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

See our latest analysis for Boom Logistics

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Boom Logistics Insiders Bought Stock Recently

Over the last three months, we've seen a bit of insider buying at Boom Logistics. Independent Non-Executive Chairman Kieran Pryke purchased AU$22k worth of shares in that period. It's good to see the insider buying, as well as the lack of recent sellers. However, in this case the amount invested recently is quite small.

Insider Ownership Of Boom Logistics

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. 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 our data, it seems that Boom Logistics insiders own 6.2% of the company, worth about AU$4.9m. However, it's possible that insiders might have an indirect interest through a more complex structure. Whilst better than nothing, we're not overly impressed by these holdings.

So What Do The Boom Logistics Insider Transactions Indicate?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. Overall the buying isn't worth writing home about. We don't take much encouragement from the transactions by Boom Logistics insiders. And usually insiders own more stock in the company, according to our data. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For example - Boom Logistics has 2 warning signs we think you should be aware of.

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 of direct interests only, but not derivative transactions or indirect interests.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.