The recent 25% drop in Critical Resources Limited's (ASX:CRR) stock could come as a blow to insiders who purchased AU$882.9k worth of stock at an average buy price of AU$0.01 over the past 12 months. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth AU$260.8k, which is not great.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

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Critical Resources Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by insider David Pevcic for AU$777k worth of shares, at about AU$0.012 per share. That means that an insider was happy to buy shares at above the current price of AU$0.003. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels. Notably David Pevcic was also the biggest seller.

In the last twelve months insiders purchased 86.93m shares for AU$883k. But insiders sold 8.33m shares worth AU$50k. Overall, Critical Resources insiders were net buyers during the last year. The average buy price was around AU$0.01. 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 want to know exactly who sold, for how much, and when, simply click on the graph below!

View our latest analysis for Critical Resources

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

Insiders At Critical Resources Have Bought Stock Recently

Over the last three months, we've seen a bit of insider buying at Critical Resources. insider Robert Martin purchased AU$50k worth of shares in that period. It's good to see the insider buying, as well as the lack of recent sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.

Does Critical Resources Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 39% of Critical Resources shares, worth about AU$2.9m. 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 Critical Resources Insiders?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. The net investment is not enough to encourage us much. However, our analysis of transactions over the last year is heartening. Insiders own shares in Critical Resources and we see no evidence to suggest they are worried about the future. 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. Case in point: We've spotted 5 warning signs for Critical Resources you should be aware of.

But note: Critical Resources 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 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.