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 Friedman Industries, Incorporated (NASDAQ:FRD), that sends out a positive message to the company's shareholders.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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The Last 12 Months Of Insider Transactions At Friedman Industries

The Chairman of the Board Michael Taylor made the biggest insider purchase in the last 12 months. That single transaction was for US$164k worth of shares at a price of US$16.54 each. That means that an insider was happy to buy shares at above the current price of US$13.97. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

Friedman Industries insiders may have bought shares in the last year, but they didn't sell any. They paid about US$14.87 on average. I'd consider this a positive as it suggests insiders see value at around the current price. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

Check out our latest analysis for Friedman Industries

Friedman Industries 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.

Insiders At Friedman Industries Have Bought Stock Recently

It's good to see that Friedman Industries insiders have made notable investments in the company's shares. Overall, three insiders shelled out US$122k for shares in the company -- and none sold. This makes one think the business has some good points.

Insider Ownership Of Friedman Industries

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data indicates that Friedman Industries insiders own about US$5.7m worth of shares (which is 5.8% of the company). Whilst better than nothing, we're not overly impressed by these holdings.

So What Do The Friedman Industries Insider Transactions Indicate?

It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Friedman Industries insiders are reasonably well aligned, and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Friedman Industries. In terms of investment risks, we've identified 2 warning signs with Friedman Industries and understanding these should be part of your investment process.

Of course Friedman Industries 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.