In the last year, multiple insiders have substantially increased their holdings of LCL Resources Limited (ASX:LCL) stock, indicating that insiders' optimism about the company's prospects has increased.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for LCL Resources

LCL Resources Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Jialing Liu bought AU$5.1m worth of shares at a price of AU$0.056 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.01). Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels. We note that Jialing Liu was both the biggest buyer and the biggest seller.

In the last twelve months insiders purchased 98.84m shares for AU$5.2m. But insiders sold 43.57m shares worth AU$4.3m. In total, LCL Resources insiders bought more than they sold over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

LCL Resources 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.

Insider Ownership Of LCL Resources

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. 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 appears that LCL Resources insiders own 21% of the company, worth about AU$2.0m. 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 Does This Data Suggest About LCL Resources Insiders?

It doesn't really mean much that no insider has traded LCL Resources shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in LCL Resources and we see no evidence to suggest they are worried about the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 6 warning signs for LCL Resources (5 shouldn't be ignored!) and we strongly recommend you look at them before investing.

But note: LCL Resources 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.