Over the last year, a good number of insiders have significantly increased their holdings in Axalta Coating Systems Ltd. (NYSE:AXTA). This is encouraging because it indicates that insiders are more optimistic about the company's prospects.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Axalta Coating Systems

The Last 12 Months Of Insider Transactions At Axalta Coating Systems

In the last twelve months, the biggest single purchase by an insider was when CEO, President & Director Chrishan Anthon Villavarayan bought US$1.0m worth of shares at a price of US$29.20 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$25.81). 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. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

Over the last year, we can see that insiders have bought 109.15k shares worth US$3.1m. On the other hand they divested 17.01k shares, for US$501k. Overall, Axalta Coating Systems 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. By clicking on the graph below, you can see the precise details of each insider transaction!

Axalta Coating Systems is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Axalta Coating Systems Insiders Bought Stock Recently

There has been significantly more insider buying, than selling, at Axalta Coating Systems, over the last three months. In fact, four insiders bought US$2.1m worth of shares. But we did see insider Jacqueline Scanlan sell shares worth US$501k. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.

Does Axalta Coating Systems Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Axalta Coating Systems insiders own about US$19m worth of shares. That equates to 0.3% of the company. 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 Does This Data Suggest About Axalta Coating Systems Insiders?

It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. Given that insiders also own a fair bit of Axalta Coating Systems we think they are probably pretty confident of a bright future. 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 assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Axalta Coating Systems.

Of course Axalta Coating Systems may not be the best stock to buy. So you may wish to see this free collection of high quality 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.