Potential iDreamSky Technology Holdings Limited (HKG:1119) shareholders may wish to note that the Co-founder, Xiangyu Chen, recently bought HK$2.8m worth of stock, paying HK$2.32 for each share. However, it only increased shareholding by a small percentage, and it wasn't a huge purchase by absolute value, either.

Check out our latest analysis for iDreamSky Technology Holdings

iDreamSky Technology Holdings Insider Transactions Over The Last Year

Notably, that recent purchase by Co-founder Xiangyu Chen was not the only time they bought iDreamSky Technology Holdings shares this year. They previously made an even bigger purchase of HK$78m worth of shares at a price of HK$5.92 per share. That means that an insider was happy to buy shares at above the current price of HK$3.73. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Xiangyu Chen was the only individual insider to buy shares in the last twelve months.

Xiangyu Chen bought 19.68m shares over the last 12 months at an average price of HK$5.38. 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.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. iDreamSky Technology Holdings insiders own 23% of the company, currently worth about HK$1.2b based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The iDreamSky Technology Holdings Insider Transactions Indicate?

It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about iDreamSky Technology Holdings. One for the watchlist, at least! 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. Every company has risks, and we've spotted 2 warning signs for iDreamSky Technology Holdings you should know about.

But note: iDreamSky Technology Holdings 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.