Insiders who bought Asara Resources Limited (ASX:AS1) stock in the last 12 months were richly rewarded last week. The company's market value increased by AU$9.9m as a result of the stock's 21% gain over the same period. In other words, the original AU$548.6k purchase is now worth AU$989.2k.

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

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The Last 12 Months Of Insider Transactions At Asara Resources

In the last twelve months, the biggest single purchase by an insider was when insider Ernest Albers bought AU$549k worth of shares at a price of AU$0.029 per share. We do like to see buying, but this purchase was made at well below the current price of AU$0.052. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

See our latest analysis for Asara Resources

Asara 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.

Does Asara Resources Boast High Insider Ownership?

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. From our data, it seems that Asara Resources insiders own 14% of the company, worth about AU$8.0m. But they may have an indirect interest through a corporate structure that we haven't picked up on. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Do The Asara Resources Insider Transactions Indicate?

It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Asara Resources insiders are reasonably well aligned, and optimistic for the future. 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. To that end, you should learn about the 4 warning signs we've spotted with Asara Resources (including 1 which is concerning).