Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Australian Dairy Nutritionals Limited (ASX:AHF), it sends a favourable message to the company's shareholders.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Australian Dairy Nutritionals

The Last 12 Months Of Insider Transactions At Australian Dairy Nutritionals

Over the last year, we can see that the biggest insider purchase was by Executive Chairman Peter Nathan for AU$81k worth of shares, at about AU$0.019 per share. Even though the purchase was made at a significantly lower price than the recent price (AU$0.058), we still think insider buying is a positive. 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.

In the last twelve months Australian Dairy Nutritionals insiders were buying shares, but not selling. Their average price was about AU$0.027. To my mind it is good that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Australian Dairy Nutritionals is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Australian Dairy Nutritionals Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at Australian Dairy Nutritionals. In total, insiders bought AU$88k worth of shares in that time, and we didn't record any sales whatsoever. This makes one think the business has some good points.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Australian Dairy Nutritionals insiders own 32% of the company, worth about AU$14m. 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 Australian Dairy Nutritionals Insiders?

It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Insiders likely see value in Australian Dairy Nutritionals shares, given these transactions (along with notable insider ownership of the company). In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Australian Dairy Nutritionals. When we did our research, we found 4 warning signs for Australian Dairy Nutritionals (2 are significant!) that we believe deserve your full attention.

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 of direct interests only, but not derivative transactions or indirect interests.

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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.