The recent 6.3% drop in Gemdale Properties and Investment Corporation Limited's (HKG:535) stock could come as a blow to insiders who purchased CN¥1.6m worth of stock at an average buy price of CN¥0.77 over the past 12 months. 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¥1.5m, which is not great.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Gemdale Properties and Investment

The Last 12 Months Of Insider Transactions At Gemdale Properties and Investment

The Non-Executive Director Lian Huat Loh made the biggest insider purchase in the last 12 months. That single transaction was for HK$790k worth of shares at a price of HK$0.79 each. That means that an insider was happy to buy shares at above the current price of HK$0.75. It's very possible they regret the purchase, but it's more likely they are bullish about the company. 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. Lian Huat Loh was the only individual insider to buy shares in the last twelve months.

Lian Huat Loh bought 2.06m shares over the last 12 months at an average price of HK$0.77. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

Gemdale Properties and Investment is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does Gemdale Properties and Investment Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 3.2% of Gemdale Properties and Investment shares, worth about HK$402m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Gemdale Properties and Investment Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Gemdale Properties and Investment shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. With high insider ownership and encouraging transactions, it seems like Gemdale Properties and Investment insiders think the business has merit. 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 4 warning signs for Gemdale Properties and Investment (of which 1 shouldn't be ignored!) you should know about.

But note: Gemdale Properties and Investment 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, but not derivative transactions.

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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.