Quite a few insiders invested in Stella-Jones Inc. (TSE:SJ) 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 Stella-Jones Inc.'s (TSE:SJ) case, it's fantastic news for shareholders.

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 Stella-Jones

The Last 12 Months Of Insider Transactions At Stella-Jones

Over the last year, we can see that the biggest insider purchase was by Independent Corporate Director Karen Laflamme for CA$70k worth of shares, at about CA$46.50 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$37.54). Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

Stella-Jones insiders may have bought shares in the last year, but they didn't sell any. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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

Insiders at Stella-Jones Have Bought Stock Recently

We saw some Stella-Jones insider buying shares in the last three months. Independent Corporate Director Karen Laflamme purchased CA$19k worth of shares in that period. We like it when there are only buyers, and no sellers. However, in this case the amount invested recently is quite small.

Does Stella-Jones Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data suggests Stella-Jones insiders own 0.2% of the company, worth about CA$4.4m. I generally like to see higher levels of ownership.

So What Does This Data Suggest About Stella-Jones Insiders?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. Overall the buying isn't worth writing home about. But insiders have shown more of an appetite for the stock, over the last year. The transactions are fine but it'd be more encouraging if Stella-Jones insiders bought more shares in the company. 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 Stella-Jones has 1 warning sign and it would be unwise to ignore this.

But note: Stella-Jones may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.