Insiders who bought Tomson Group Limited (HKG:258) stock in the last 12 months were richly rewarded last week. The company's market value increased by HK$845m as a result of the stock's 21% gain over the same period. As a result, the stock they originally bought for HK$134.2m is now worth HK$200.8m.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Tomson Group Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by MD & Chairman Feng Hsu for HK$73m worth of shares, at about HK$1.52 per share. Even though the purchase was made at a significantly lower price than the recent price (HK$2.28), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

In the last twelve months Tomson Group 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. By clicking on the graph below, you can see the precise details of each insider transaction!

Tomson Group 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

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Tomson Group insiders own 66% of the company, worth about HK$2.8b. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Tomson Group Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. But insiders have shown more of an appetite for the stock, over the last year. With high insider ownership and encouraging transactions, it seems like Tomson Group insiders think the business has merit. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Tomson Group. For example, Tomson Group has 4 warning signs (and 2 which make us uncomfortable) we think you should know about.

But note: Tomson Group 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.