For West African Resources Limited (ASX:WAF) insiders, selling AU$1.9m worth of stock earlier this year was a smart move.

West African Resources Limited's (ASX:WAF) stock rose 5.6% last week, but insiders who sold AU$1.9m worth of stock over the last year are probably in a more advantageous position. Holding on to stock would have meant their investment would be worth less now than it was at the time of sale. Thus selling at an average price of AU$1.40, which is higher than the current price, may have been the best decision.

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.

Check out our latest analysis for West African Resources

The Last 12 Months Of Insider Transactions At West African Resources

In the last twelve months, the biggest single sale by an insider was when the Founder, Richard Hyde, sold AU$1.4m worth of shares at a price of AU$1.39 per share. So what is clear is that an insider saw fit to sell at around the current price of AU$1.33. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.

Insiders in West African Resources didn't buy any shares in 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!

I will like West African Resources better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership of West African Resources

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. It appears that West African Resources insiders own 3.7% of the company, worth about AU$50m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About West African Resources Insiders?

The fact that there have been no West African Resources insider transactions recently certainly doesn't bother us. We don't take much encouragement from the transactions by West African Resources insiders. The modest level of insider ownership is, at least, some comfort. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 1 warning sign for West African Resources you should know about.

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.