Those following along with Touch Ventures Limited (ASX:TVL) will no doubt be intrigued by the recent purchase of shares by Michael Jefferies, Independent Non-Executive Chairman of the company, who spent a stonking AU$1.4m on stock at an average price of AU$0.062. That purchase boosted their holding by 155%, which makes us wonder if the move was inspired by quietly confident deeply-felt optimism.

Check out our latest analysis for Touch Ventures

Touch Ventures Insider Transactions Over The Last Year

Notably, that recent purchase by Michael Jefferies is the biggest insider purchase of Touch Ventures shares that we've seen in the last year. We do like to see buying, but this purchase was made at well below the current price of AU$0.07. 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.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Touch Ventures 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.

Insider Ownership Of Touch Ventures

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our data indicates that Touch Ventures insiders own about AU$5.5m worth of shares (which is 11% of the company). We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. We do generally prefer see higher levels of insider ownership.

What Might The Insider Transactions At Touch Ventures Tell Us?

The recent insider purchase is heartening. 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. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Touch Ventures insiders are expecting a bright future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 3 warning signs for Touch Ventures (2 shouldn't be ignored!) that we believe deserve your full attention.

But note: Touch Ventures 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.