Investors who take an interest in China Ludao Technology Company Limited (HKG:2023) should definitely note that the Executive Chairman & CEO, Yuerong Yu, recently paid HK$0.93 per share to buy HK$1.5m worth of the stock. Although the purchase is not a big one, by either a percentage standpoint or absolute value, it can be seen as a good sign.

See our latest analysis for China Ludao Technology

China Ludao Technology Insider Transactions Over The Last Year

Notably, that recent purchase by Executive Chairman & CEO Yuerong Yu was not the only time they bought China Ludao Technology shares this year. They previously made an even bigger purchase of HK$2.0m worth of shares at a price of HK$0.89 per share. That implies that an insider found the current price of HK$0.96 per share to be enticing. 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. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. Happily, the China Ludao Technology insider decided to buy shares at close to current prices. The only individual insider to buy over the last year was Yuerong Yu.

Yuerong Yu bought 7.31m shares over the last 12 months at an average price of HK$0.94. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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 China Ludao Technology Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. China Ludao Technology insiders own 50% of the company, currently worth about HK$238m based on the recent share price. 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 China Ludao Technology Insider Transactions Indicate?

The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest China Ludao Technology insiders are well aligned, and quite possibly think the share price is too low. That's what I like to see! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 3 warning signs for China Ludao Technology (of which 1 shouldn't be ignored!) you should know about.

But note: China Ludao Technology 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.