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

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.

Check out our latest analysis for NewPeak Metals

NewPeak Metals Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by insider Gerhard Redelinghuys for AU$160k worth of shares, at about AU$0.015 per share. That means that even when the share price was higher than AU$0.014 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

While NewPeak Metals insiders bought shares during the last year, they didn't sell. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

NewPeak Metals 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.

Insiders At NewPeak Metals Have Bought Stock Recently

We saw some NewPeak Metals insider buying shares in the last three months. CEO & Executive Director David Mason bought AU$21k worth of shares in that time. We like it when there are only buyers, and no sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.

Does NewPeak Metals Boast High Insider Ownership?

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. NewPeak Metals insiders own about AU$1.7m worth of shares. That equates to 40% of the company. 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 NewPeak Metals Tell Us?

Our data shows a little insider buying, but no selling, in the last three months. Overall the buying isn't worth writing home about. However, our analysis of transactions over the last year is heartening. Insiders own shares in NewPeak 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. In terms of investment risks, we've identified 4 warning signs with NewPeak Metals and understanding them should be part of your investment process.

Of course NewPeak 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.