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

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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ARC Funds Insider Transactions Over The Last Year

The Non-Executive Director Harley Grosser made the biggest insider purchase in the last 12 months. That single transaction was for AU$284k worth of shares at a price of AU$0.088 each. So it's clear an insider wanted to buy, at around the current price, which is AU$0.091. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. Happily, the ARC Funds insiders decided to buy shares at close to current prices.

ARC Funds insiders may have bought shares in the last year, but they didn't sell any. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Check out our latest analysis for ARC Funds

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).

Are ARC Funds Insiders Buying Or Selling?

We've only seen a tiny insider purchase valued at AU$0.09, in the last three months. So it is hard to draw any conclusion about how insiders are feeling about the stock, from these recent trades.

Insider Ownership Of ARC Funds

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. ARC Funds insiders own about AU$1.4m worth of shares. That equates to 34% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The ARC Funds Insider Transactions Indicate?

Our data shows a little insider buying, but no selling, in the last three months. The net investment is not enough to encourage us much. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in ARC Funds and we see no evidence to suggest they are worried about the future. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For example, ARC Funds has 4 warning signs (and 3 which are a bit concerning) we think you should know about.

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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.