When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in ReadCloud Limited's (ASX:RCL) instance, it's good news for shareholders.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for ReadCloud

ReadCloud Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Independent Non-Executive Director Paul Collins for AU$80k worth of shares, at about AU$0.06 per share. We do like to see buying, but this purchase was made at well below the current price of AU$0.099. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

While ReadCloud 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. By clicking on the graph below, you can see the precise details of each insider transaction!

ReadCloud is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, 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. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that ReadCloud insiders own 31% of the company, worth about AU$4.5m. 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 Do The ReadCloud Insider Transactions Indicate?

The fact that there have been no ReadCloud insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. Overall we don't see anything to make us think ReadCloud insiders are doubting the company, and they do own shares. 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. When we did our research, we found 4 warning signs for ReadCloud (2 can't be ignored!) that we believe deserve your full attention.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.