Insiders who bought AU$1.77m worth of DGL Group Limited's (ASX:DGL) stock at an average buy price of AU$0.59 over the last year may be disappointed by the recent 12% decrease in the stock. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only AU$1.39m.

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.

View our latest analysis for DGL Group

DGL Group Insider Transactions Over The Last Year

The Founder Simon Henry made the biggest insider purchase in the last 12 months. That single transaction was for AU$969k worth of shares at a price of AU$0.59 each. That means that even when the share price was higher than AU$0.47 (the recent price), an insider wanted to purchase shares. 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 encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Simon Henry was the only individual insider to buy shares in the last twelve months.

Simon Henry purchased 2.99m shares over the year. The average price per share was AU$0.59. 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!

DGL Group 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 DGL Group 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. DGL Group insiders own about AU$76m worth of shares (which is 57% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At DGL Group Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. But insiders have shown more of an appetite for the stock, over the last year. Judging from their transactions, and high insider ownership, DGL Group insiders feel good about the company's future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing DGL Group. In terms of investment risks, we've identified 2 warning signs with DGL Group and understanding these should be part of your investment process.

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.

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.