The recent 17% drop in Sunkwan Properties Group Limited's (HKG:6900) stock could come as a blow to insiders who purchased CN¥11m worth of stock at an average buy price of CN¥2.45 over the past 12 months. 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¥5.6m which is not ideal.

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 Sunkwan Properties Group

The Last 12 Months Of Insider Transactions At Sunkwan Properties Group

The CEO & Chairman of the Board Jing Zhu made the biggest insider purchase in the last 12 months. That single transaction was for HK$11m worth of shares at a price of HK$2.45 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$1.25). 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. 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. Jing Zhu was the only individual insider to buy shares in the last twelve months.

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!

Sunkwan Properties Group 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.

Insider Ownership Of Sunkwan Properties Group

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Sunkwan Properties Group insiders own 36% of the company, currently worth about HK$943m 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.

What Might The Insider Transactions At Sunkwan Properties Group Tell Us?

The fact that there have been no Sunkwan Properties Group insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. Judging from their transactions, and high insider ownership, Sunkwan Properties Group insiders feel good about the company's future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Sunkwan Properties Group. Every company has risks, and we've spotted 2 warning signs for Sunkwan Properties Group (of which 1 is potentially serious!) you should know about.

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.