Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Firetail Resources Limited (ASX:FTL), it sends a favourable 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.

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The insider Brett Grosvenor made the biggest insider purchase in the last 12 months. That single transaction was for AU$80k worth of shares at a price of AU$0.04 each. We do like to see buying, but this purchase was made at well below the current price of AU$0.092. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

While Firetail Resources insiders bought shares during the last year, they didn't sell. They paid about AU$0.048 on average. It is certainly positive to see that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Check out our latest analysis for Firetail Resources

Firetail Resources is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

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. From our data, it seems that Firetail Resources insiders own 8.4% of the company, worth about AU$2.9m. However, it's possible that insiders might have an indirect interest through a more complex structure. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

It doesn't really mean much that no insider has traded Firetail Resources shares in the last quarter. However, our analysis of transactions over the last year is heartening. We'd like to see bigger individual holdings. However, we don't see anything to make us think Firetail Resources insiders are doubting the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example, Firetail Resources has 4 warning signs (and 2 which are a bit unpleasant) we think you should know about.