Insiders who bought US$6.45m worth of Alto Ingredients, Inc. (NASDAQ:ALTO) stock in the last year have seen some of their losses recouped as the stock gained 13% last week. However, total losses seen by insiders are still US$3.0m since the time of purchase.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Our free stock report includes 1 warning sign investors should be aware of before investing in Alto Ingredients. Read for free now.

The Last 12 Months Of Insider Transactions At Alto Ingredients

Over the last year, we can see that the biggest insider purchase was by insider Bradley Radoff for US$5.5m worth of shares, at about US$1.86 per share. That means that even when the share price was higher than US$0.90 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. 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.

Alto Ingredients insiders may have bought shares in the last year, but they didn't sell any. They paid about US$1.66 on average. I'd consider this a positive as it suggests insiders see value at around the current price. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

See our latest analysis for Alto Ingredients

Alto Ingredients is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Alto Ingredients Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at Alto Ingredients. Not only was there no selling that we can see, but they collectively bought US$6.3m worth of shares. This is a positive in our book as it implies some confidence.

Insider Ownership Of Alto Ingredients

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Insiders own 10% of Alto Ingredients shares, worth about US$7.0m, according to our data. We do generally prefer see higher levels of insider ownership.

So What Does This Data Suggest About Alto Ingredients Insiders?

The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Alto Ingredients insiders are reasonably well aligned, and optimistic for the future. While it's good to be aware of 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. Every company has risks, and we've spotted 1 warning sign for Alto Ingredients 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 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.