Insiders who acquired CN¥48.6m worth of XJ International Holdings Co., Ltd.'s (HKG:1765) stock at an average price of CN¥0.30 in the past 12 months may be dismayed by the recent 23% price decline. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth CN¥25.7m, which is not great.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

XJ International Holdings Insider Transactions Over The Last Year

The CEO, President & Executive Director Huiwu Wang made the biggest insider purchase in the last 12 months. That single transaction was for HK$24m worth of shares at a price of HK$0.30 each. That means that an insider was happy to buy shares at above the current price of HK$0.16. 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. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Huiwu Wang was the only individual insider to buy shares in the last twelve months.

Huiwu Wang bought a total of 159.65m shares over the year at an average price of HK$0.30. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Does XJ International Holdings Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. From looking at our data, insiders own HK$28m worth of XJ International Holdings stock, about 2.1% of the company. But they may have an indirect interest through a corporate structure that we haven't picked up on. I generally like to see higher levels of ownership.

What Might The Insider Transactions At XJ International Holdings Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in XJ International Holdings and we see no evidence to suggest they are worried about the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing XJ International Holdings. At Simply Wall St, we've found that XJ International Holdings has 4 warning signs (2 make us uncomfortable!) that deserve your attention before going any further with your analysis.

But note: XJ International Holdings 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.