Looking at TerraCom Limited's (ASX:TER ) insider transactions over the last year, we can see that insiders were net buyers. That is, there were more number of shares purchased by insiders than there were sold.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for TerraCom

The Last 12 Months Of Insider Transactions At TerraCom

Over the last year, we can see that the biggest insider purchase was by Non-Executive Chairman Mark Lochtenberg for AU$348k worth of shares, at about AU$0.24 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.19). Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Mark Lochtenberg was the only individual insider to buy shares in the last twelve months.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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).

Insider Ownership Of TerraCom

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From our data, it seems that TerraCom insiders own 7.2% of the company, worth about AU$11m. 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!

So What Does This Data Suggest About TerraCom Insiders?

It doesn't really mean much that no insider has traded TerraCom shares in the last quarter. However, our analysis of transactions over the last year is heartening. Overall we don't see anything to make us think TerraCom insiders are doubting the company, and they do own shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing TerraCom. To help with this, we've discovered 2 warning signs (1 is significant!) that you ought to be aware of before buying any shares in TerraCom.