Looking at Luyuan Group Holding (Cayman) Limited's (HKG:2451 ) insider transactions over the last year, we can see that insiders were net sellers. That is, there were more number of shares sold by insiders than there were purchased.

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.

Luyuan Group Holding (Cayman) Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, David Dingman, sold HK$19m worth of shares at a price of HK$7.37 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of HK$6.30. So it may not tell us anything about how insiders feel about the current share price. The only individual insider seller over the last year was David Dingman.

David Dingman sold a total of 5.60m shares over the year at an average price of CN¥6.64. 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!

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Insiders At Luyuan Group Holding (Cayman) Have Sold Stock Recently

The last three months saw significant insider selling at Luyuan Group Holding (Cayman). Specifically, insider David Dingman ditched HK$18m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Does Luyuan Group Holding (Cayman) 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. Luyuan Group Holding (Cayman) insiders own about HK$1.8b worth of shares (which is 68% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Luyuan Group Holding (Cayman) Insider Transactions Indicate?

An insider hasn't bought Luyuan Group Holding (Cayman) stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. But it is good to see that Luyuan Group Holding (Cayman) is growing earnings. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that Luyuan Group Holding (Cayman) is showing 2 warning signs in our investment analysis, and 1 of those makes us a bit uncomfortable...

But note: Luyuan Group Holding (Cayman) 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com