Some of the losses seen by insiders who purchased US$1.4m worth of Hanesbrands Inc. (NYSE:HBI) shares over the past year were recovered after the stock increased by 6.5% over the past week. However, the purchase is proving to be an expensive wager as insiders are yet to get ahead of their losses which currently stand at US$180k since the time of purchase.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Hanesbrands

Hanesbrands Insider Transactions Over The Last Year

The CEO & Director Stephen Bratspies made the biggest insider purchase in the last 12 months. That single transaction was for US$502k worth of shares at a price of US$14.63 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$9.17). Their view may have changed since then, but at least it shows they felt optimistic at the time. 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.

Hanesbrands insiders may have bought shares in the last year, but they didn't sell any. The average buy price was around US$10.54. I'd consider this a positive as it suggests insiders see value at around the current price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Hanesbrands is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insiders At Hanesbrands Have Bought Stock Recently

It's good to see that Hanesbrands insiders have made notable investments in the company's shares. In total, insiders bought US$785k 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

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. Insiders own 1.1% of Hanesbrands shares, worth about US$36m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Hanesbrands Tell Us?

It is good to see recent purchasing. And the longer term insider transactions also give us confidence. Given that insiders also own a fair bit of Hanesbrands 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 Hanesbrands. At Simply Wall St, we've found that Hanesbrands has 2 warning signs (1 can't be ignored!) that deserve your attention before going any further with your analysis.

But note: Hanesbrands 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, but not derivative transactions.

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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.