Multiple insiders secured a larger position in Spirit Technology Solutions Ltd (ASX:ST1) shares over the last 12 months. This is reassuring as this suggests that insiders have increased optimism about the company's prospects.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Spirit Technology Solutions

The Last 12 Months Of Insider Transactions At Spirit Technology Solutions

Over the last year, we can see that the biggest insider purchase was by Non-Executive Director Shan Kanji for AU$16m worth of shares, at about AU$0.05 per share. We do like to see buying, but this purchase was made at well below the current price of AU$0.056. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Happily, we note that in the last year insiders paid AU$29m for 561.84m shares. But they sold 9.00m shares for AU$479k. In the last twelve months there was more buying than selling by Spirit Technology Solutions insiders. 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!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Spirit Technology Solutions Insiders Bought Stock Recently

There has been significantly more insider buying, than selling, at Spirit Technology Solutions, over the last three months. In total, eight insiders bought AU$6.4m worth of shares in that time. On the other hand, insiders netted AU$281k by selling. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.

Does Spirit Technology Solutions 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Spirit Technology Solutions insiders own 68% of the company, currently worth about AU$71m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Spirit Technology Solutions Tell Us?

The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest Spirit Technology Solutions insiders are well aligned, and quite possibly think the share price is too low. That's what I like to see! 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. When we did our research, we found 3 warning signs for Spirit Technology Solutions (2 are significant!) that we believe deserve your full attention.

Of course Spirit Technology Solutions may not be the best stock to buy. So you may wish to see this free collection of high quality 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.

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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.