Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Imperial Brands PLC (LON:IMB), that sends out a positive message to the company's shareholders.

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

Check out our latest analysis for Imperial Brands

The Last 12 Months Of Insider Transactions At Imperial Brands

In the last twelve months, the biggest single purchase by an insider was when Independent Non-Executive Director Robert Kunze-Concewitz bought UK£156k worth of shares at a price of UK£15.58 per share. So it's clear an insider wanted to buy, at around the current price, which is UK£16.66. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for Imperial Brands share holders is that insiders were buying at near the current price.

While Imperial Brands insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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

Insider Ownership of Imperial Brands

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. I reckon it's a good sign if insiders own a significant number of shares in the company. Imperial Brands insiders own about UK£902m worth of shares (which is 5.8% 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 Does This Data Suggest About Imperial Brands Insiders?

The fact that there have been no Imperial Brands insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. It would be great to see more insider buying, but overall it seems like Imperial Brands insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Case in point: We've spotted 3 warning signs for Imperial Brands you should be aware of, and 1 of these makes us a bit uncomfortable.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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, but not derivative transactions.

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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.