Last week, McLaren Minerals Limited (ASX:MML) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 14% last week, resulting in a AU$708k increase in the company's market worth, implying a 16% gain on their initial purchase. In other words, the original AU$403.7k purchase is now worth AU$466.4k.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Our free stock report includes 6 warning signs investors should be aware of before investing in McLaren Minerals. Read for free now.

McLaren Minerals Insider Transactions Over The Last Year

The insider Andrew Haythorpe made the biggest insider purchase in the last 12 months. That single transaction was for AU$201k worth of shares at a price of AU$0.035 each. We do like to see buying, but this purchase was made at well below the current price of AU$0.041. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

While McLaren Minerals insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Check out our latest analysis for McLaren Minerals

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).

Insiders At McLaren Minerals Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at McLaren Minerals. Specifically, insider Jason Peterson bought AU$93k worth of shares in that time, and we didn't record any sales whatsoever. This makes one think the business has some good points.

Does McLaren Minerals Boast High 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. McLaren Minerals insiders own about AU$2.7m worth of shares (which is 47% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About McLaren Minerals Insiders?

It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Once you factor in the high insider ownership, it certainly seems like insiders are positive about McLaren Minerals. One for the watchlist, at least! 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. For instance, we've identified 6 warning signs for McLaren Minerals (4 are significant) you should be aware of.

Of course McLaren Minerals 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.