Metal Hawk Limited (ASX:MHK) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 36% resulting in a AU$13m addition to the company’s market value. As a result, the stock they originally bought for AU$736.1k is now worth AU$2.05m.

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.

See our latest analysis for Metal Hawk

Metal Hawk Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Timothy Rupert Goyder bought AU$400k worth of shares at a price of AU$0.20 per share. We do like to see buying, but this purchase was made at well below the current price of AU$0.42. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

While Metal Hawk insiders bought shares during the last year, they didn't sell. They paid about AU$0.15 on average. We don't deny that it is nice to see insiders buying stock in the company. But we must note that the investments were made at well below today's share price. 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!

Metal Hawk is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership Of Metal Hawk

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 26% of Metal Hawk shares, worth about AU$12m. 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 Metal Hawk Tell Us?

It doesn't really mean much that no insider has traded Metal Hawk shares in the last quarter. However, our analysis of transactions over the last year is heartening. Insiders own shares in Metal Hawk and we see no evidence to suggest they are worried about the future. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Our analysis shows 5 warning signs for Metal Hawk (3 are a bit concerning!) and we strongly recommend you look at these before investing.

Of course Metal Hawk 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.