Last week, Macro Metals Limited (ASX:M4M) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 13% last week, resulting in a AU$3.6m increase in the company's market worth, implying a 200% gain on their initial purchase. In other words, the original AU$1.38m purchase is now worth AU$4.15m.

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

See our latest analysis for Macro Metals

Macro Metals Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Non-Executive Chairman Tolga Kumova for AU$324k worth of shares, at about AU$0.005 per share. We do like to see buying, but this purchase was made at well below the current price of AU$0.009. 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.

Macro Metals insiders may have bought shares in the last year, but they didn't sell any. Their average price was about AU$0.003. We don't deny that it is nice to see insiders buying stock in the company. However, we do note that they were buying at significantly lower prices than today's share price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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.

Macro Metals Insiders Bought Stock Recently

Over the last three months, we've seen a bit of insider buying at Macro Metals. MD & Director Simon Rushton purchased AU$29k worth of shares in that period. It's good to see the insider buying, as well as the lack of recent sellers. However, in this case the amount invested recently is quite small.

Insider Ownership Of Macro Metals

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. It appears that Macro Metals insiders own 27% of the company, worth about AU$8.7m. 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 Does This Data Suggest About Macro Metals Insiders?

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. However, our analysis of transactions over the last year is heartening. Insiders own shares in Macro Metals and we see no evidence to suggest they are worried about the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that Macro Metals is showing 5 warning signs in our investment analysis, and 4 of those are significant...

Of course Macro Metals 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.