Olaplex Holdings, Inc. (NASDAQ:OLPX) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 25% resulting in a US$344m addition to the company’s market value. Put another way, the original US$376.2k acquisition is now worth US$480.8k.

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.

View our latest analysis for Olaplex Holdings

The Last 12 Months Of Insider Transactions At Olaplex Holdings

In the last twelve months, the biggest single purchase by an insider was when Executive Chair of the Board John Paul Bilbrey bought US$376k worth of shares at a price of US$2.05 per share. Even though the purchase was made at a significantly lower price than the recent price (US$2.62), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

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!

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

Does Olaplex Holdings Boast High 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. Insiders own 0.9% of Olaplex Holdings shares, worth about US$14m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Olaplex Holdings Tell Us?

The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. Insiders likely see value in Olaplex Holdings shares, given these transactions (along with notable insider ownership of the company). 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. While conducting our analysis, we found that Olaplex Holdings has 2 warning signs and it would be unwise to ignore them.

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.