When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Magnachip Semiconductor Corporation's (NYSE:MX) 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 do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Magnachip Semiconductor

The Last 12 Months Of Insider Transactions At Magnachip Semiconductor

In the last twelve months, the biggest single purchase by an insider was when CEO & Director Young-Joon Kim bought US$100k worth of shares at a price of US$5.61 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$4.07). It's very possible they regret the purchase, but it's more likely they are bullish about the company. 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.

While Magnachip Semiconductor insiders bought shares during the last year, they didn't sell. 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!

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

Insider Ownership Of Magnachip Semiconductor

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 4.8% of Magnachip Semiconductor shares, worth about US$7.1m, according to our data. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Do The Magnachip Semiconductor Insider Transactions Indicate?

The fact that there have been no Magnachip Semiconductor insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. We'd like to see bigger individual holdings. However, we don't see anything to make us think Magnachip Semiconductor insiders are doubting the company. 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. At Simply Wall St, we've found that Magnachip Semiconductor has 2 warning signs (1 makes us a bit uncomfortable!) that deserve your attention before going any further with your analysis.

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.