Whilst it may not be a huge deal, we thought it was good to see that the Imperial Pacific Limited (ASX:IPC) Chairman, Peter E. Murray, recently bought AU$90k worth of stock, for AU$1.25 per share. However, it only increased their shares held by 2.8%, and it wasn't a huge purchase by absolute value, either.

See our latest analysis for Imperial Pacific

Imperial Pacific Insider Transactions Over The Last Year

In fact, the recent purchase by Chairman Peter E. Murray was not their only acquisition of Imperial Pacific shares this year. Earlier in the year, they paid AU$1.51 per share in a AU$104k purchase. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$1.20). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Peter E. Murray was the only individual insider to buy during the last year.

Peter E. Murray bought a total of 188.81k shares over the year at an average price of AU$1.34. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Imperial Pacific insiders own about AU$5.2m worth of shares (which is 83% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Imperial Pacific Insider Transactions Indicate?

The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Imperial Pacific. One for the watchlist, at least! 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 Imperial Pacific is showing 6 warning signs in our investment analysis, and 4 of those are a bit unpleasant...