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

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Great Southern Mining

Great Southern Mining Insider Transactions Over The Last Year

Notably, that recent purchase by Joseph Pinto is the biggest insider purchase of Great Southern Mining shares that we've seen in the last year. That means that an insider was happy to buy shares at above the current price of AU$0.016. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels. Notably Joseph Pinto was also the biggest seller.

In the last twelve months insiders purchased 58.61m shares for AU$1.1m. On the other hand they divested 17.69m shares, for AU$366k. In total, Great Southern Mining insiders bought more than they sold over the last year. They paid about AU$0.019 on average. This is nice to see since it implies that insiders might see value around current prices. 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!

Great Southern Mining 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.

Great Southern Mining Insiders Bought Stock Recently

At Great Southern Mining,over the last quarter, we have observed quite a lot more insider buying than insider selling. We can see that insider Joseph Pinto paid AU$1.0m for shares in the company. On the other hand, insider Joseph Pinto netted AU$366k by selling. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Great Southern Mining insiders own 50% of the company, currently worth about AU$6.8m 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.

So What Does This Data Suggest About Great Southern Mining Insiders?

It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Great Southern Mining. 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. Our analysis shows 4 warning signs for Great Southern Mining (2 are a bit unpleasant!) and we strongly recommend you look at these before investing.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

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.