The recent price decline of 10% in Global Lithium Resources Limited's (ASX:GL1) stock may have disappointed insiders who bought AU$1.09m worth of shares at an average price of AU$0.46 in the past 12 months. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth AU$411.3k, which is not what they expected.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Global Lithium Resources

Global Lithium Resources Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Executive Director Dianmin Chen bought AU$684k worth of shares at a price of AU$0.36 per share. That means that an insider was happy to buy shares at above the current price of AU$0.17. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. The only individual insider to buy over the last year was Dianmin Chen.

Dianmin Chen bought 2.35m shares over the last 12 months at an average price of AU$0.46. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Global Lithium Resources insiders own 15% of the company, worth about AU$6.9m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Global Lithium Resources Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think Global Lithium Resources 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 Global Lithium Resources. Every company has risks, and we've spotted 4 warning signs for Global Lithium Resources (of which 2 are a bit unpleasant!) you should know about.