Insiders who bought AU$283.9k worth of Altamin Limited (ASX:AZI) stock in the last year recovered part of their losses as the stock rose by 23% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled AU$74k since the time of purchase.

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.

See our latest analysis for Altamin

The Last 12 Months Of Insider Transactions At Altamin

The Non-Executive Director Marcello Cardaci made the biggest insider purchase in the last 12 months. That single transaction was for AU$108k worth of shares at a price of AU$0.05 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.037). Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

While Altamin insiders bought shares during the last year, they didn't sell. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership

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. Altamin insiders own about AU$3.3m worth of shares. That equates to 21% 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.

What Might The Insider Transactions At Altamin Tell Us?

It doesn't really mean much that no insider has traded Altamin shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think Altamin insiders are doubting the company, and they do own shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Altamin. For instance, we've identified 6 warning signs for Altamin (4 are potentially serious) you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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 of direct interests only, but not derivative transactions or indirect interests.

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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.