When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Leggett & Platt, Incorporated's (NYSE:LEG) instance, it's good news for shareholders.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

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The Last 12 Months Of Insider Transactions At Leggett & Platt

Over the last year, we can see that the biggest insider purchase was by President Karl Glassman for US$273k worth of shares, at about US$11.48 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$6.90). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

While Leggett & Platt 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 Leggett & Platt

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

Does Leggett & Platt Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Leggett & Platt insiders own about US$21m worth of shares. That equates to 2.3% of the company. 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 Leggett & Platt Tell Us?

The fact that there have been no Leggett & Platt insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. Overall we don't see anything to make us think Leggett & Platt 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 Leggett & Platt. Our analysis shows 2 warning signs for Leggett & Platt (1 shouldn't be ignored!) and we strongly recommend you look at them before investing.

But note: Leggett & Platt may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.