Insiders who purchased IPB Petroleum Limited (ASX:IPB) earlier this year lose an additional AU$13k as the stock sinks to AU$0.009

Insiders who acquired AU$157k worth of IPB Petroleum Limited's (ASX:IPB) stock at an average price of AU$0.0098 in the past 12 months may be dismayed by the recent 31% price decline. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only AU$144k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for IPB Petroleum

IPB Petroleum Insider Transactions Over The Last Year

The insider Sihol Gultom made the biggest insider purchase in the last 12 months. That single transaction was for AU$157k worth of shares at a price of AU$0.01 each. That means that an insider was happy to buy shares at above the current price of AU$0.009. 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. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Sihol Gultom was the only individual insider to buy during the last year.

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!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that IPB Petroleum insiders own 43% of the company, worth about AU$1.8m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The IPB Petroleum Insider Transactions Indicate?

It doesn't really mean much that no insider has traded IPB Petroleum shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Judging from their transactions, and high insider ownership, IPB Petroleum insiders feel good about the company's future. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For example, IPB Petroleum has 5 warning signs (and 4 which are significant) we think 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, but not derivative transactions.

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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.