Insiders who purchased US$310.7k worth of Gaia, Inc. (NASDAQ:GAIA) shares over the past year recouped some of their losses after price gained 18% last week. The purchase, however, has proven to be a pricey bet, with losses currently totalling US$107k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

Gaia Insider Transactions Over The Last Year

Notably, that recent purchase by Paul Sutherland is the biggest insider purchase of Gaia shares that we've seen in the last year. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$1.46. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

While Gaia insiders bought shares during the last year, they didn't sell. The average buy price was around US$2.23. These transactions suggest that insiders have considered the current price attractive. 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!

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

Insiders At Gaia Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at Gaia. Specifically, Independent Director Paul Sutherland bought US$97k worth of shares in that time, and we didn't record any sales whatsoever. This makes one think the business has some good points.

Insider Ownership Of Gaia

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. Gaia insiders own about US$13m worth of shares. That equates to 33% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Gaia Insider Transactions Indicate?

It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Gaia insiders are well aligned, and that they may think the share price is too low. 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. While conducting our analysis, we found that Gaia has 3 warning signs and it would be unwise to ignore them.

But note: Gaia may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.

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.