When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Far East Gold Limited's (ASX:FEG) instance, it's good news for shareholders.

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.

View our latest analysis for Far East Gold

Far East Gold Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Independent Non-Executive Chairman Justin Werner bought AU$250k worth of shares at a price of AU$0.14 per share. We do like to see buying, but this purchase was made at well below the current price of AU$0.17. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Happily, we note that in the last year insiders paid AU$292k for 2.15m shares. On the other hand they divested 147.06k shares, for AU$20k. In the last twelve months there was more buying than selling by Far East Gold insiders. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

Far East Gold is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insiders At Far East Gold Have Bought Stock Recently

It's good to see that Far East Gold insiders have made notable investments in the company's shares. Overall, two insiders shelled out AU$260k for shares in the company -- and none sold. That shows some optimism about the company's future.

Does Far East Gold Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Insiders own 19% of Far East Gold shares, worth about AU$11m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Far East Gold Tell Us?

It is good to see recent purchasing. And the longer term insider transactions also give 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 Far East Gold 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. To help with this, we've discovered 3 warning signs (1 doesn't sit too well with us!) that you ought to be aware of before buying any shares in Far East Gold.

Of course Far East Gold may not be the best stock to buy. So you may wish to see this free collection of high quality 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.