Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Collins Foods Limited (ASX:CKF), that sends out a positive 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, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Collins Foods

The Last 12 Months Of Insider Transactions At Collins Foods

The Independent Non-Executive Chairman Robert Kaye made the biggest insider purchase in the last 12 months. That single transaction was for AU$192k worth of shares at a price of AU$8.91 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$8.60). 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. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels. We note that Robert Kaye was both the biggest buyer and the biggest seller.

Happily, we note that in the last year insiders paid AU$372k for 45.14k shares. But they sold 21.55k shares for AU$192k. In total, Collins Foods insiders bought more than they sold over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

Collins Foods 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 Collins Foods Have Bought Stock Recently

We saw some Collins Foods insider buying shares in the last three months. Independent Non-Executive Chairman Robert Kaye shelled out AU$22k for shares in that time. We like it when there are only buyers, and no sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Collins Foods insiders own 7.0% of the company, worth about AU$71m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Collins Foods Insiders?

Our data shows a little insider buying, but no selling, in the last three months. That said, the purchases were not large. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in Collins Foods and their transactions don't cause us concern. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Collins Foods.

Of course Collins Foods may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.