The recent price decline of 15% in Powerlong Commercial Management Holdings Limited's (HKG:9909) stock may have disappointed insiders who bought CN¥15m worth of shares at an average price of CN¥9.22 in 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¥5.8m 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 Powerlong Commercial Management Holdings

The Last 12 Months Of Insider Transactions At Powerlong Commercial Management Holdings

Over the last year, we can see that the biggest insider purchase was by Chairman & President Wa Fong Hoi for HK$5.5m worth of shares, at about HK$5.46 per share. That means that an insider was happy to buy shares at above the current price of HK$3.65. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for 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.

Powerlong Commercial Management Holdings insiders may have bought shares in the last year, but they didn't sell any. The average buy price was around HK$9.22. I'd consider this a positive as it suggests insiders see value at around the current price. 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!

Powerlong Commercial Management Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insider Ownership Of Powerlong Commercial Management Holdings

Many investors like to check how much of a company is owned by 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. Insiders own 11% of Powerlong Commercial Management Holdings shares, worth about HK$252m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Powerlong Commercial Management Holdings Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Powerlong Commercial Management Holdings shares in the last quarter. However, our analysis of transactions over the last year is heartening. It would be great to see more insider buying, but overall it seems like Powerlong Commercial Management Holdings insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Powerlong Commercial Management Holdings. Case in point: We've spotted 1 warning sign for Powerlong Commercial Management Holdings you should be aware of.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.