Even if it's not a huge purchase, we think it was good to see that Jay Hughes, a Atrum Coal Limited (ASX:ATU) insider, recently shelled out AU$122k to buy stock, at AU$0.0058 per share. While we're hesitant to get too excited about a purchase of that size, we do note it increased their holding by a solid 19%.

See our latest analysis for Atrum Coal

The Last 12 Months Of Insider Transactions At Atrum Coal

In fact, the recent purchase by insider Jay Hughes was not their only acquisition of Atrum Coal shares this year. Earlier in the year, they paid AU$0.0077 per share in a AU$141k purchase. That means that even when the share price was higher than AU$0.005 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

In the last twelve months Atrum Coal insiders were buying shares, but not selling. 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!

Atrum Coal 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 Atrum Coal

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Atrum Coal insiders own 34% of the company, worth about AU$2.4m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Atrum Coal Insiders?

It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Atrum Coal insiders are well aligned, and that they may think the share price is too low. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Atrum Coal. While conducting our analysis, we found that Atrum Coal has 6 warning signs and it would be unwise to ignore these.

But note: Atrum Coal may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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, but not derivative transactions.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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