As Badger Infrastructure Solutions Ltd. (TSE:BDGI) drops to CA$938m market cap, insiders might rethink their US$3.5m stock purchase earlier this year

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Insiders who bought US$3.5m worth of Badger Infrastructure Solutions Ltd.’s (TSE:BDGI) stock at an average buy price of US$32.51 over the last year may be disappointed by the recent 11% decrease in the stock. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth US$3.0m which is not ideal.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Badger Infrastructure Solutions

Badger Infrastructure Solutions Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Independent Chair of the Board Glen Roane bought CA$729k worth of shares at a price of CA$36.42 per share. That means that even when the share price was higher than CA$27.20 (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. We always take careful note of the price insiders pay when purchasing shares. 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. Notably Glen Roane was also the biggest seller.

Happily, we note that in the last year insiders paid CA$3.5m for 108.76k shares. But they sold 12.60k shares for CA$395k. In total, Badger Infrastructure Solutions insiders bought more than they sold over the last year. They paid about CA$32.51 on average. This is nice to see since it implies that insiders might see value around current prices. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume

Badger Infrastructure Solutions 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.

Insiders at Badger Infrastructure Solutions Have Bought Stock Recently

Over the last three months, we’ve seen significantly more insider buying, than insider selling, at Badger Infrastructure Solutions. In fact, two insiders bought CA$418k worth of shares. On the other hand, insiders netted CA$234k by selling. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.

Insider Ownership of Badger Infrastructure Solutions

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 Badger Infrastructure Solutions insiders own 0.9% of the company, worth about CA$8.1m. We do generally prefer see higher levels of insider ownership.

What Might The Insider Transactions At Badger Infrastructure Solutions Tell Us?

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. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Badger Infrastructure Solutions stock. While we like knowing 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. You’d be interested to know, that we found 2 warning signs for Badger Infrastructure Solutions and we suggest you have a look.

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.