Quite a few insiders have dramatically grown their holdings in Topaz Energy Corp. (TSE:TPZ) over the past 12 months. An insider’s optimism about the company’s prospects is a positive sign.

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.

See our latest analysis for Topaz Energy

In fact, the recent purchase by Michael Rose was the biggest purchase of Topaz Energy shares made by an insider individual in the last twelve months, according to our records. So it’s clear an insider wanted to buy, at around the current price, which is CA$27.21. 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. Happily, the Topaz Energy insiders decided to buy shares at close to current prices.

While Topaz Energy insiders bought shares during the last year, they didn’t sell. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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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).

Over the last quarter, Topaz Energy insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought CA$4.4m worth of shares. This could be interpreted as suggesting a positive outlook.

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. Topaz Energy insiders own about CA$177m worth of shares (which is 4.3% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

It’s certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Topaz Energy. One for the watchlist, at least! 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 2 warning signs for Topaz Energy (1 can’t be ignored!) that we believe deserve your full attention.

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