Potential Alma Metals Limited (ASX:ALM) shareholders may wish to note that the Executive Chairman, Alasdair Cooke, recently bought AU$196k worth of stock, paying AU$0.015 for each share. That's a very decent purchase to our minds and it grew their holding by a solid 11%.

View our latest analysis for Alma Metals

Alma Metals Insider Transactions Over The Last Year

Notably, that recent purchase by Executive Chairman Alasdair Cooke was not the only time they bought Alma Metals shares this year. Earlier in the year, they paid AU$0.008 per share in a AU$200k purchase. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.006). 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. 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.

Over the last year, we can see that insiders have bought 68.76m shares worth AU$693k. But insiders sold 668.66k shares worth AU$6.0k. In total, Alma Metals insiders bought more than they sold over the last year. Their average price was about AU$0.01. These transactions suggest that insiders have considered the current price attractive. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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).

Does Alma Metals 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. We usually like to see fairly high levels of insider ownership. Insiders own 15% of Alma Metals shares, worth about AU$1.4m. 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 Alma Metals Insider Transactions Indicate?

The recent insider purchases are 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. Given that insiders also own a fair bit of Alma Metals we think they are probably pretty confident of a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Alma Metals. For example, Alma Metals has 5 warning signs (and 4 which are a bit concerning) we think you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.

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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.