Investors who take an interest in BeijingWest Industries International Limited (HKG:2339) should definitely note that the Executive Chairman, Xiaojie Dong, recently paid HK$0.17 per share to buy HK$1.6m worth of the stock. We reckon that's a good sign, especially since the purchase boosted their holding by 468,595%.

BeijingWest Industries International Insider Transactions Over The Last Year

Notably, that recent purchase by Xiaojie Dong is the biggest insider purchase of BeijingWest Industries International shares that we've seen in the last year. That means that an insider was happy to buy shares at above the current price of HK$0.17. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

In the last twelve months BeijingWest Industries International insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

BeijingWest Industries International 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.

Does BeijingWest Industries International Boast High 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 isn't picking up on much insider ownership at BeijingWest Industries International, though insiders do hold about HK$664 worth of shares. But they may have an indirect interest through a corporate structure that we haven't picked up on. It's always possible we are missing something but from our data, it looks like insider ownership is minimal.

So What Does This Data Suggest About BeijingWest Industries International Insiders?

The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that BeijingWest Industries International insiders are expecting a bright future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 2 warning signs for BeijingWest Industries International (1 is significant!) that we believe deserve your full attention.

But note: BeijingWest Industries International 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.

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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.