Quite a few insiders invested in IGO Limited (ASX:IGO) last year which is positive news for shareholders

It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in IGO Limited's (ASX:IGO) case, it's fantastic news for shareholders.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for IGO

The Last 12 Months Of Insider Transactions At IGO

In the last twelve months, the biggest single purchase by an insider was when Independent Non-Executive Director Xiaoping Yang bought AU$170k worth of shares at a price of AU$17.01 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$12.00). It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels. We note that Xiaoping Yang was both the biggest buyer and the biggest seller.

Happily, we note that in the last year insiders paid AU$389k for 25.99k shares. On the other hand they divested 10.20k shares, for AU$162k. Overall, IGO insiders were net buyers during the last year. The average buy price was around AU$14.98. This is nice to see since it implies that insiders might see value around current prices. 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!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insider Ownership Of IGO

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that IGO insiders own 0.4% of the company, worth about AU$37m. 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 Do The IGO Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. Insiders own shares in IGO and we see no evidence to suggest they are worried about the 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. You'd be interested to know, that we found 1 warning sign for IGO and we suggest you have a look.

Of course IGO 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.