In the last year, multiple insiders have substantially increased their holdings of Epsilon Energy Ltd. (NASDAQ:EPSN) stock, indicating that insiders' optimism about the company's prospects has increased.

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

Check out our latest analysis for Epsilon Energy

Epsilon Energy Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by President Jason Stabell for US$1.2m worth of shares, at about US$4.82 per share. We do like to see buying, but this purchase was made at well below the current price of US$5.67. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

In the last twelve months Epsilon Energy insiders were buying shares, but not selling. 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!

Epsilon Energy 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 Epsilon Energy Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at Epsilon Energy. Overall, two insiders shelled out US$1.3m for shares in the company -- and none sold. This makes one think the business has some good points.

Does Epsilon Energy Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 4.7% of Epsilon Energy shares, worth about US$6.0m, according to our data. We do generally prefer see higher levels of insider ownership.

So What Do The Epsilon Energy Insider Transactions Indicate?

It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Epsilon Energy stock. 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. Our analysis shows 3 warning signs for Epsilon Energy (2 are concerning!) and we strongly recommend you look at these before investing.

But note: Epsilon Energy 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.