Insiders of Alkane Resources Limited (ASX:ALK) are up 0.4% on their AU$9.1m purchase after Alkane Resources Limited (ASX:ALK) rose 10% last week

Alkane Resources Limited (ASX:ALK) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 10%, resulting in a AU$42m rise in the company's market capitalisation. In other words, the original AU$9.1m purchase is now worth AU$9.1m.

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.

See our latest analysis for Alkane Resources

The Last 12 Months Of Insider Transactions At Alkane Resources

In the last twelve months, the biggest single purchase by an insider was when Independent Non-Executive Chairman Ian Gandel bought AU$9.1m worth of shares at a price of AU$0.74 per share. That implies that an insider found the current price of AU$0.74 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. The good news for Alkane Resources share holders is that an insider was buying at near the current price. The only individual insider to buy over the last year was Ian Gandel.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Alkane Resources is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership Of Alkane Resources

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. It appears that Alkane Resources insiders own 11% of the company, worth about AU$51m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Alkane Resources Insiders?

It doesn't really mean much that no insider has traded Alkane Resources shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Alkane Resources and their transactions don't cause us concern. 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. While conducting our analysis, we found that Alkane Resources has 1 warning sign and it would be unwise to ignore it.

Of course Alkane Resources 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, 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.