Native Mineral Resources Holdings Limited (ASX:NMR) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 25%, resulting in a AU$3.2m rise in the company's market capitalisation, translating to a gain of 60% on their initial investment. As a result, their original purchase of AU$556.2k worth of stock is now worth AU$890.8k.

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 Native Mineral Resources Holdings

The Last 12 Months Of Insider Transactions At Native Mineral Resources Holdings

In the last twelve months, the biggest single purchase by an insider was when insider Dean Mellers bought AU$355k worth of shares at a price of AU$0.023 per share. Even though the purchase was made at a significantly lower price than the recent price (AU$0.04), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Native Mineral Resources Holdings insiders may have bought shares in the last year, but they didn't sell any. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, 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. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insiders At Native Mineral Resources Holdings Have Bought Stock Recently

It's good to see that Native Mineral Resources Holdings insiders have made notable investments in the company's shares. Specifically, insider Dean Mellers bought AU$355k worth of shares in that time, and we didn't record any sales whatsoever. This could be interpreted as suggesting a positive outlook.

Insider Ownership Of Native Mineral Resources Holdings

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Native Mineral Resources Holdings insiders own 33% of the company, worth about AU$5.3m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Native Mineral Resources Holdings Insiders?

The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. Given that insiders also own a fair bit of Native Mineral Resources Holdings we think they are probably pretty confident of a bright future. While it's good to be aware of 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. To help with this, we've discovered 6 warning signs (4 are concerning!) that you ought to be aware of before buying any shares in Native Mineral Resources Holdings.

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 of direct interests only, but not derivative transactions or indirect interests.

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.