We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Alchemy Resources Limited (ASX:ALY).

Do Insider Transactions Matter?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.

We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.

View our latest analysis for Alchemy Resources

The Last 12 Months Of Insider Transactions At Alchemy Resources

insider Stephen Nordstrom made the biggest insider purchase in the last 12 months. That single transaction was for AU$198k worth of shares at a price of AU$0.016 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.012). It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

While Alchemy Resources insiders bought shares last year, they didn't sell. They paid about AU$0.013 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 individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Alchemy Resources is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insiders at Alchemy Resources Have Bought Stock Recently

Over the last quarter, Alchemy Resources insiders have spent a meaningful amount on shares. Overall, two insiders shelled out AU$211k for shares in the company -- and none sold. This is a positive in our book as it implies some confidence.

Insider Ownership of Alchemy Resources

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 31% of Alchemy Resources shares, worth about AU$2.2m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.