Insiders who purchased US$30m worth of JS Global Lifestyle Company Limited (HKG:1691) shares over the past year recouped some of their losses after price gained 4.5% last week. The purchase, however, has proven to be a pricey bet, with losses currently totalling US$6.0m.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for JS Global Lifestyle

JS Global Lifestyle Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Executive Chairman Xuning Wang for HK$15m worth of shares, at about HK$9.49 per share. That means that even when the share price was higher than HK$9.43 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

JS Global Lifestyle insiders may have bought shares in the last year, but they didn't sell any. Their average price was about HK$11.79. This is nice to see since it implies that insiders might see value around current prices. 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!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Does JS Global Lifestyle Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that JS Global Lifestyle insiders own 62% of the company, worth about HK$20b. 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 JS Global Lifestyle Insider Transactions Indicate?

It doesn't really mean much that no insider has traded JS Global Lifestyle shares in the last quarter. 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 JS Global Lifestyle insiders think the business has merit. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. While conducting our analysis, we found that JS Global Lifestyle has 1 warning sign and it would be unwise to ignore it.

But note: JS Global Lifestyle 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.