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 Australian Dairy Nutritionals Limited (ASX:AHF), 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, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Australian Dairy Nutritionals

Australian Dairy Nutritionals Insider Transactions Over The Last Year

Notably, that recent purchase by Peter Nathan is the biggest insider purchase of Australian Dairy Nutritionals shares that we've seen in the last year. That means that even when the share price was higher than AU$0.018 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for 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 Australian Dairy Nutritionals 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!

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 Australian Dairy Nutritionals Have Bought Stock Recently

Over the last quarter, Australian Dairy Nutritionals insiders have spent a meaningful amount on shares. Non-Executive Chairman Peter Nathan spent AU$81k on stock, and there wasn't any selling. This makes one think the business has some good points.

Insider Ownership Of Australian Dairy Nutritionals

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Australian Dairy Nutritionals insiders own about AU$3.4m worth of shares. That equates to 29% of the company. 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 Australian Dairy Nutritionals Insider Transactions Indicate?

It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Given that insiders also own a fair bit of Australian Dairy Nutritionals we think they are probably pretty confident of a bright future. 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. Case in point: We've spotted 4 warning signs for Australian Dairy Nutritionals you should be aware of, and 2 of these make us uncomfortable.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.