While Joy Spreader Group Inc. (HKG:6988) shareholders have had a good week with the stock up 9.8%, they shouldn't let their guards down. The fact that insiders chose to dispose of HK$69m worth of stock in the past 12 months even though prices were relatively low could be indicative of some anticipated weakness.

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

Check out our latest analysis for Joy Spreader Group

Joy Spreader Group Insider Transactions Over The Last Year

The Head of Joy Spreader Interactive Group (HK) Limited, Zhidi Zhang, made the biggest insider sale in the last 12 months. That single transaction was for HK$69m worth of shares at a price of HK$2.20 each. That means that even when the share price was below the current price of HK$2.70, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was 61% of Zhidi Zhang's holding. Zhidi Zhang was the only individual insider to sell over the last year.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like Joy Spreader Group better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Does Joy Spreader Group Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. It's great to see that Joy Spreader Group insiders own 37% of the company, worth about HK$2.3b. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Joy Spreader Group Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Joy Spreader Group insider transactions don't fill us with confidence. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Joy Spreader Group. Our analysis shows 3 warning signs for Joy Spreader Group (1 is potentially serious!) and we strongly recommend you look at them before investing.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.