Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Aurum Resources Limited (ASX:AUE), that sends out a positive message to the company's shareholders.

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.

Check out our latest analysis for Aurum Resources

Aurum Resources Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by MD & Non-Independent Non-Executive Director Caigen Wang for AU$240k worth of shares, at about AU$0.24 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.34. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Aurum Resources insiders may have bought shares in the last year, but they didn't sell any. 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 Of Aurum Resources

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Aurum Resources insiders own about AU$9.7m worth of shares. That equates to 16% 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 Aurum Resources Tell Us?

It doesn't really mean much that no insider has traded Aurum Resources shares in the last quarter. However, our analysis of transactions over the last year is heartening. Insiders own shares in Aurum Resources and we see no evidence to suggest they are worried about 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. Every company has risks, and we've spotted 3 warning signs for Aurum Resources (of which 2 are potentially serious!) you should know about.

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.