Potential Gowing Bros. Limited (ASX:GOW) shareholders may wish to note that the MD & Executive Chairman, John Gowing, recently bought AU$217k worth of stock, paying AU$2.17 for each share. However, it only increased shareholding by a small percentage, and it wasn't a huge purchase by absolute value, either.

View our latest analysis for Gowing Bros

The Last 12 Months Of Insider Transactions At Gowing Bros

Over the last year, we can see that the biggest insider purchase was by insider Philip Feitelson for AU$1.2m worth of shares, at about AU$2.40 per share. That means that an insider was happy to buy shares at above the current price of AU$2.17. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. 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.

Gowing Bros insiders may have bought shares in the last year, but they didn't sell any. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Gowing Bros is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Does Gowing Bros Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. 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's great to see that Gowing Bros insiders own 52% of the company, worth about AU$60m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Gowing Bros Insider Transactions Indicate?

The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Gowing Bros insiders are well aligned, and quite possibly think the share price is too low. That's what I like to see! While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Our analysis shows 2 warning signs for Gowing Bros (1 can't be ignored!) and we strongly recommend you look at these before investing.

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.