Insiders who bought Lisi Group (Holdings) Limited (HKG:526) stock in the last 12 months were richly rewarded last week. The company's market value increased by HK$416m as a result of the stock's 29% gain over the same period. In other words, the original CN¥60.8m purchase is now worth CN¥166.4m.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

Lisi Group (Holdings) Insider Transactions Over The Last Year

The insider Alexia David made the biggest insider purchase in the last 12 months. That single transaction was for HK$61m worth of shares at a price of HK$0.076 each. We do like to see buying, but this purchase was made at well below the current price of HK$0.21. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

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 Lisi Group (Holdings) Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Lisi Group (Holdings) insiders own about HK$1.0b worth of shares (which is 57% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Lisi Group (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. Judging from their transactions, and high insider ownership, Lisi Group (Holdings) insiders feel good about the company's future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Lisi Group (Holdings). Our analysis shows 4 warning signs for Lisi Group (Holdings) (1 doesn't sit too well with us!) and we strongly recommend you look at them before investing.

But note: Lisi Group (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.