Those following along with Shanghai XNG Holdings Limited (HKG:3666) will no doubt be intrigued by the recent purchase of shares by Dorson Gu, Chairman of the company, who spent a stonking HK$7.7m on stock at an average price of HK$0.07. That purchase boosted their holding by 294%, which makes us wonder if the move was inspired by quietly confident deeply-felt optimism.

Check out our latest analysis for Shanghai XNG Holdings

The Last 12 Months Of Insider Transactions At Shanghai XNG Holdings

In fact, the recent purchase by Dorson Gu was the biggest purchase of Shanghai XNG Holdings shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was higher than HK$0.06 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. 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. The only individual insider to buy over the last year was Dorson Gu.

The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Does Shanghai XNG Holdings Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Shanghai XNG Holdings insiders own 52% of the company, currently worth about HK$66m 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 Shanghai XNG Holdings Insiders?

It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Shanghai XNG Holdings insiders are well aligned, and quite possibly think the share price is too low. One for the watchlist, at least! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Shanghai XNG Holdings. To help with this, we've discovered 4 warning signs (3 are significant!) that you ought to be aware of before buying any shares in Shanghai XNG Holdings.

But note: Shanghai XNG 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.