Viewing insider transactions for China Risun Group Limited's (HKG:1907 ) over the last year, we see that insiders were net buyers. This means that a larger number of shares were purchased by insiders in relation to shares sold.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

The Last 12 Months Of Insider Transactions At China Risun Group

In the last twelve months, the biggest single purchase by an insider was when CEO & Chairman Xuegang Yang bought HK$13m worth of shares at a price of HK$3.00 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$2.86). Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Xuegang Yang was the only individual insider to buy during the last year.

Xuegang Yang bought a total of 6.94m shares over the year at an average price of HK$3.00. 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!

China Risun 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 Of China Risun Group

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. China Risun Group insiders own 74% of the company, currently worth about HK$9.1b based on the recent share price. 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 China Risun Group Insider Transactions Indicate?

It doesn't really mean much that no insider has traded China Risun Group shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. It would be great to see more insider buying, but overall it seems like China Risun Group insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing China Risun Group. To that end, you should learn about the 2 warning signs we've spotted with China Risun Group (including 1 which is a bit unpleasant).

But note: China Risun 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.