Those following along with Greentown Management Holdings Company Limited (HKG:9979) will no doubt be intrigued by the recent purchase of shares by Jiafeng Guo, Co-Chairman of the Board of the company, who spent a stonking HK$13m on stock at an average price of HK$2.85. That increased their holding by a full 223%, which arguably implies the sort of confidence required for a shy sweet-natured nerd to ask the most popular kid in the school to go out on a date.

Greentown Management Holdings Insider Transactions Over The Last Year

In fact, the recent purchase by Jiafeng Guo was the biggest purchase of Greentown Management Holdings 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 above the current price of HK$2.81. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. The only individual insider to buy over the last year was Jiafeng Guo.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

Greentown Management Holdings is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

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. Our data suggests Greentown Management Holdings insiders own 0.4% of the company, worth about HK$22m. I generally like to see higher levels of ownership.

What Might The Insider Transactions At Greentown Management Holdings Tell Us?

It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. When combined with notable insider ownership, these factors suggest Greentown Management Holdings insiders are well aligned, and that they may think the share price is too low. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of Greentown Management Holdings.

Of course Greentown Management Holdings 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.