When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Aeris Environmental Ltd's (ASX:AEI) instance, it's good news for 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 Aeris Environmental

The insider Bernard Stang made the biggest insider purchase in the last 12 months. That single transaction was for AU$328k worth of shares at a price of AU$0.051 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.042). 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. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Notably Bernard Stang was also the biggest seller.

Happily, we note that in the last year insiders paid AU$1.6m for 39.17m shares. But they sold 2.50m shares for AU$75k. In total, Aeris Environmental insiders bought more than they sold over the last year. Their average price was about AU$0.041. These transactions show that insiders have confidence to invest their own money in the stock, albeit at slightly below the recent price. 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!

Check out our latest analysis for Aeris Environmental

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insiders At Aeris Environmental Have Bought Stock Recently

There has been significantly more insider buying, than selling, at Aeris Environmental, over the last three months. In total, three insiders bought AU$1.3m worth of shares in that time. But insider Bernard Stang sold shares worth AU$75k. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with 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. Insiders own 35% of Aeris Environmental shares, worth about AU$3.6m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Aeris Environmental Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Insiders likely see value in Aeris Environmental shares, given these transactions (along with notable insider ownership of the company). So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For example, Aeris Environmental has 5 warning signs (and 4 which are a bit unpleasant) we think you should know about.

Of course Aeris Environmental 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.

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.