Red Hill Iron Limited (ASX:RHI) shareholders (or potential shareholders) will be happy to see that the Executive Chairman, Joshua Pitt, recently bought a whopping AU$1.0m worth of stock, at a price of AU$4.08. There's no denying a buy of that magnitude suggests conviction in a brighter future, although we do note that proportionally it only increased their holding by 2.0%.

Check out our latest analysis for Red Hill Iron

Red Hill Iron Insider Transactions Over The Last Year

In fact, the recent purchase by Joshua Pitt was the biggest purchase of Red Hill Iron shares made by an insider individual in the last twelve months, according to our records. That implies that an insider found the current price of AU$4.39 per share to be enticing. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. 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 Red Hill Iron share holders is that an insider was buying at near the current price. The only individual insider to buy over the last year was Joshua Pitt.

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!

Red Hill Iron is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership

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's great to see that Red Hill Iron insiders own 69% of the company, worth about AU$181m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Red Hill Iron 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. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Red Hill Iron. Looks promising! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For instance, we've identified 3 warning signs for Red Hill Iron (2 can't be ignored) you should be aware of.

But note: Red Hill Iron 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.

This article by Simply Wall St is general in nature. 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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