It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Middle Island Resources Limited's (ASX:MDI) case, it's fantastic news for shareholders.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Middle Island Resources

Middle Island Resources Insider Transactions Over The Last Year

The insider Daniel Raihani made the biggest insider purchase in the last 12 months. That single transaction was for AU$226k worth of shares at a price of AU$0.015 each. That means that an insider was happy to buy shares at around the current price of AU$0.016. Of course they may have changed their mind. But this suggests they are optimistic. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. The good news for Middle Island Resources share holders is that insiders were buying at near the current price.

In the last twelve months Middle Island Resources insiders were buying shares, but not selling. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

Middle Island Resources is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Middle Island Resources Insiders Bought Stock Recently

It's good to see that Middle Island Resources insiders have made notable investments in the company's shares. Overall, two insiders shelled out AU$287k for shares in the company -- and none sold. That shows some optimism about the company's future.

Insider Ownership Of Middle Island Resources

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. It appears that Middle Island Resources insiders own 31% of the company, worth about AU$1.4m. 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 Middle Island Resources Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Given that insiders also own a fair bit of Middle Island Resources we think they are probably pretty confident of a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Middle Island Resources. Every company has risks, and we've spotted 5 warning signs for Middle Island Resources (of which 4 are potentially serious!) you should know about.

Of course Middle Island Resources 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.