When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in KMD Brands Limited's (NZSE:KMD) instance, it's good news for shareholders.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for KMD Brands

KMD Brands Insider Transactions Over The Last Year

The Group CEO Michael Daly made the biggest insider purchase in the last 12 months. That single transaction was for NZ$86k worth of shares at a price of NZ$0.54 each. That means that even when the share price was higher than NZ$0.40 (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. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

Over the last year, we can see that insiders have bought 631.88k shares worth NZ$336k. On the other hand they divested 100.00k shares, for NZ$51k. Overall, KMD Brands insiders were net buyers during the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

KMD Brands 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 KMD Brands Have Bought Stock Recently

Over the last three months, we've seen a bit of insider buying at KMD Brands. Independent Non-Executive Director Abigail Foote shelled out NZ$47k for shares in that time. It's great to see that insiders are only buying, not selling. However, in this case the amount invested recently is quite small.

Does KMD Brands Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our data isn't picking up on much insider ownership at KMD Brands, though insiders do hold about NZ$1.2m worth of shares. But they may have an indirect interest through a corporate structure that we haven't picked up on. This level of insider ownership is notably low, and not very encouraging.

What Might The Insider Transactions At KMD Brands Tell Us?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. Overall the buying isn't worth writing home about. On a brighter note, the transactions over the last year are encouraging. The transactions are fine but it'd be more encouraging if KMD Brands insiders bought more shares in the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing KMD Brands. Case in point: We've spotted 1 warning sign for KMD Brands you should be aware of.

But note: KMD Brands 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.