Insiders of IGO Limited (ASX:IGO) reaped rewards after their AU$818k investment jumped another AU$720k

Insiders who bought IGO Limited (ASX:IGO) stock in the last 12 months were richly rewarded last week. The company's market value increased by AU$303m as a result of the stock's 4.3% gain over the same period. As a result, the stock they originally bought for AU$818k is now worth AU$1.5m.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for IGO

The Last 12 Months Of Insider Transactions At IGO

The Independent Non-Executive Chairman Michael P. Nossal made the biggest insider purchase in the last 12 months. That single transaction was for AU$256k worth of shares at a price of AU$6.40 each. We do like to see buying, but this purchase was made at well below the current price of AU$9.66. 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.

IGO insiders may have bought shares in the last year, but they didn't sell any. Their average price was about AU$5.14. To my mind it is good that insiders have invested their own money in the company. But we must note that the investments were made at well below today's share price. 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!

IGO is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insiders at IGO Have Bought Stock Recently

We saw some IGO insider buying shares in the last three months. Independent Non-Executive Director Xiaoping Yang bought AU$31k worth of shares in that time. It's good to see the insider buying, as well as the lack of recent sellers. However, in this case the amount invested recently is quite small.

Insider Ownership of IGO

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 0.5% of IGO shares, worth about AU$36m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At IGO Tell Us?

We note a that there has been a bit of insider buying recently (but no selling). The net investment is not enough to encourage us much. However, our analysis of transactions over the last year is heartening. Overall we don't see anything to make us think IGO insiders are doubting the company, and they do own shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 4 warning signs with IGO and understanding these should be part of your investment process.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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, 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.
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