When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Champion Iron Limited's (ASX:CIA) instance, it's good news for shareholders.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

The Last 12 Months Of Insider Transactions At Champion Iron

Over the last year, we can see that the biggest insider purchase was by Executive Chairman William O’Keeffe for AU$629k worth of shares, at about AU$6.29 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$4.86). 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. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

In the last twelve months insiders purchased 232.05k shares for AU$1.4m. But insiders sold 31.95k shares worth AU$166k. In total, Champion Iron insiders bought more than they sold over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

View our latest analysis for Champion Iron

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insiders At Champion Iron Have Bought Stock Recently

There has been significantly more insider buying, than selling, at Champion Iron, over the last three months. Insiders spent AU$1.4m on shares. On the other hand, Senior Vice-President of Sales François Lavoie netted AU$166k by selling. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.

Does Champion Iron Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Champion Iron insiders own 11% of the company, worth about AU$289m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Champion Iron Insiders?

The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Champion Iron. Nice! 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. At Simply Wall St, we've found that Champion Iron has 4 warning signs (1 is significant!) that deserve your attention before going any further with your analysis.

But note: Champion Iron 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.