Hyliion Holdings Corp. (NYSE:HYLN) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 18%, resulting in a US$75m rise in the company's market capitalisation, translating to a gain of 305% on their initial investment. Put another way, the original US$449.6k acquisition is now worth US$1.82m.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Hyliion Holdings Insider Transactions Over The Last Year

The Founder Thomas Healy made the biggest insider purchase in the last 12 months. That single transaction was for US$158k worth of shares at a price of US$0.64 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$2.82. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Over the last year, we can see that insiders have bought 645.00k shares worth US$450k. But they sold 37.50k shares for US$23k. Overall, Hyliion Holdings insiders were net buyers during the last year. 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!

Hyliion Holdings 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.

Hyliion Holdings Insiders Bought Stock Recently

It's good to see that Hyliion Holdings insiders have made notable investments in the company's shares. We can see that Chief Commercial Officer Govindaraj Ramasamy paid US$58k for shares in the company. No-one sold. This makes one think the business has some good points.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Hyliion Holdings insiders own 24% of the company, currently worth about US$118m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Hyliion Holdings Insiders?

The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Hyliion Holdings. 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. To that end, you should learn about the 3 warning signs we've spotted with Hyliion Holdings (including 2 which are a bit concerning).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.