It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Olaplex Holdings, Inc.'s (NASDAQ:OLPX) case, it's fantastic news for shareholders.

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.

Olaplex Holdings Insider Transactions Over The Last Year

The Executive Chair of the Board John Paul Bilbrey made the biggest insider purchase in the last 12 months. That single transaction was for US$376k worth of shares at a price of US$2.05 each. That means that an insider was happy to buy shares at above the current price of US$1.93. 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 insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

In the last twelve months insiders purchased 303.32k shares for US$585k. On the other hand they divested 87.25k shares, for US$139k. Overall, Olaplex 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 want to know exactly who sold, for how much, and when, simply click on the graph below!

Olaplex Holdings is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Olaplex Holdings Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at Olaplex Holdings. In total, insiders bought US$209k worth of shares in that time, and we didn't record any sales whatsoever. This could be interpreted as suggesting a positive outlook.

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. I reckon it's a good sign if insiders own a significant number of shares in the company. Olaplex Holdings insiders own about US$17m worth of shares. That equates to 1.4% 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 Olaplex Holdings Insiders?

It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. Given that insiders also own a fair bit of Olaplex Holdings we think they are probably pretty confident of a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Olaplex Holdings. While conducting our analysis, we found that Olaplex Holdings has 1 warning sign and it would be unwise to ignore this.

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.