Independent Non

Even if it's not a huge purchase, we think it was good to see that Dominic O'Hanlon, the Independent Non-Executive Chair of BikeExchange Limited (ASX:BEX) recently shelled out AU$100k to buy stock, at AU$0.009 per share. While we're hesitant to get too excited about a purchase of that size, we do note it increased their holding by a solid 28%.

Check out our latest analysis for BikeExchange

In fact, the recent purchase by Independent Non-Executive Chair Dominic O'Hanlon was not their only acquisition of BikeExchange shares this year. Earlier in the year, they paid AU$0.02 per share in a AU$500k purchase. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.005). 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. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

While BikeExchange insiders bought shares during the last year, they didn't sell. They paid about AU$0.016 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 want to know exactly who sold, for how much, and when, simply click on the graph below!

BikeExchange is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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. We usually like to see fairly high levels of insider ownership. BikeExchange insiders own about AU$986k worth of shares. That equates to 17% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Given that insiders also own a fair bit of BikeExchange we think they are probably pretty confident of 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. At Simply Wall St, we found 5 warning signs for BikeExchange that deserve your attention before buying any shares.

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.

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