Multiple insiders secured a larger position in Virtu Financial, Inc. (NASDAQ:VIRT) shares over the last 12 months. This is reassuring as this suggests that insiders have increased optimism 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, we would consider it foolish to ignore insider transactions altogether.

Virtu Financial Insider Transactions Over The Last Year

The Co-founder Douglas Cifu made the biggest insider purchase in the last 12 months. That single transaction was for US$853k worth of shares at a price of US$17.06 each. Even though the purchase was made at a significantly lower price than the recent price (US$22.16), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

In the last twelve months Virtu Financial insiders were buying shares, but not selling. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insider Ownership Of Virtu Financial

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 2.6% of Virtu Financial shares, worth about US$59m. 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 Virtu Financial Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Virtu Financial shares in the last quarter. However, our analysis of transactions over the last year is heartening. Overall we don't see anything to make us think Virtu Financial insiders are doubting the company, and they do own shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 1 warning sign with Virtu Financial and understanding this should be part of your investment process.

Of course Virtu Financial 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.