Those following along with Aon plc (NYSE:AON) will no doubt be intrigued by the recent purchase of shares by Lester Knight, Independent Non-Executive Chairman of the Board of the company, who spent a stonking US$15m on stock at an average price of US$302. Not only is that a big swing, but it increased their holding size by 17%, which is definitely great to see.

View our latest analysis for Aon

Aon Insider Transactions Over The Last Year

In fact, the recent purchase by Lester Knight was the biggest purchase of Aon shares made by an insider individual in the last twelve months, according to our records. That means that an insider was happy to buy shares at around the current price of US$313. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. In this case we're pleased to report that the insider purchases were made at close to current prices.

Happily, we note that in the last year insiders paid US$15m for 50.80k shares. But they sold 8.50k shares for US$2.8m. In the last twelve months there was more buying than selling by Aon insiders. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership Of Aon

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Aon insiders own 1.2% of the company, currently worth about US$743m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Aon Insider Transactions Indicate?

It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest Aon insiders are well aligned, and quite possibly think the share price is too low. Nice! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 2 warning signs for Aon (1 is concerning!) and we strongly recommend you look at them before investing.