Insiders who acquired CN¥20m worth of Greentown Service Group Co. Ltd.'s (HKG:2869) stock at an average price of CN¥5.64 in the past 12 months may be dismayed by the recent 6.8% price decline. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth CN¥18m which is not ideal.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Greentown Service Group

The Last 12 Months Of Insider Transactions At Greentown Service Group

Over the last year, we can see that the biggest insider purchase was by insider Weiping Song for HK$10m worth of shares, at about HK$5.57 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$5.24). It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Weiping Song was the only individual insider to buy shares in the last twelve months.

Weiping Song purchased 3.50m shares over the year. The average price per share was HK$5.64. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Greentown Service Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Does Greentown Service Group Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Greentown Service Group insiders own 17% of the company, currently worth about HK$2.8b based on the recent share price. 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 Greentown Service Group Insiders?

It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Greentown Service Group. Nice! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Greentown Service Group. Case in point: We've spotted 3 warning signs for Greentown Service Group you should be aware of, and 1 of these is concerning.

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.