Even if it's not a huge purchase, we think it was good to see that Glen Chipman, the Executive Director of Commercial & Director of Iron Road Limited (ASX:IRD) recently shelled out AU$55k to buy stock, at AU$0.18 per share. That purchase might not be huge but it did increase their holding by 20%.

See our latest analysis for Iron Road

The Last 12 Months Of Insider Transactions At Iron Road

Notably, that recent purchase by Executive Director of Commercial & Director Glen Chipman was not the only time they bought Iron Road shares this year. Earlier in the year, they paid AU$0.19 per share in a AU$57k purchase. That means that an insider was happy to buy shares at above the current price of AU$0.18. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. 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.

Iron Road insiders may have bought shares in the last year, but they didn't sell any. 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! insider-trading-volume

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

Insider Ownership of Iron Road

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data suggests Iron Road insiders own 3.7% of the company, worth about AU$5.3m. We prefer to see high levels of insider ownership.



So What Does This Data Suggest About Iron Road Insiders?

It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Iron Road insiders are reasonably well aligned, and optimistic for the 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 Iron Road is showing 3 warning signs in our investment analysis, and 2 of those can't be ignored...

But note: Iron Road may not be the best stock to buy. So take a peek at this freelist 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.

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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.