We wouldn't blame Jy Gas Limited (HKG:1407) shareholders if they were a little worried about the fact that Linjiang Luan, the Executive Chairman recently netted about HK$76m selling shares at an average price of HK$0.70. Probably the most concerning element of the whole transaction is that the disposal amounted to 100% of their entire holding.

Jy Gas Insider Transactions Over The Last Year

In fact, the recent sale by Linjiang Luan was the biggest sale of Jy Gas shares made by an insider individual in the last twelve months, according to our records. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is HK$0.52. So it is hard to draw any strong conclusion from it.

The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Does Jy Gas 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Jy Gas insiders own 74% of the company, currently worth about HK$170m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Jy Gas Insider Transactions Indicate?

An insider sold Jy Gas shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 5 warning signs for Jy Gas (of which 1 is potentially serious!) you should know about.

But note: Jy Gas 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.