Koonenberry Gold Limited (ASX:KNB) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 19%, resulting in a AU$5.2m rise in the company's market capitalisation, translating to a gain of 74% on their initial investment. As a result, the stock they originally bought for AU$2.24m is now worth AU$3.89m.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

Koonenberry Gold Insider Transactions Over The Last Year

In fact, the recent purchase by Emanuel Datt was the biggest purchase of Koonenberry Gold shares made by an insider individual in the last twelve months, according to our records. Even though the purchase was made at a significantly lower price than the recent price (AU$0.037), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

In the last twelve months Koonenberry Gold insiders were buying shares, but not selling. They paid about AU$0.021 on average. It is certainly positive to see that insiders have invested their own money in the company. But we must note that the investments were made at well below today's share price. 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!

See our latest analysis for Koonenberry Gold

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

Koonenberry Gold Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at Koonenberry Gold. We can see that insider Emanuel Datt paid AU$1.6m for shares in the company. No-one sold. That shows some optimism about the company's future.

Insider Ownership Of Koonenberry Gold

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 20% of Koonenberry Gold shares, worth about AU$6.5m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Koonenberry Gold Tell Us?

It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Koonenberry Gold insiders are well aligned, and that they may think the share price is too low. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we've found that Koonenberry Gold has 5 warning signs (3 shouldn't be ignored!) 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.

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.