The recent price decline of 15% in Tian Lun Gas Holdings Limited's (HKG:1600) stock may have disappointed insiders who bought CN¥1.77m worth of shares at an average price of CN¥4.84 in the past 12 months. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only CN¥927.1k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

Tian Lun Gas Holdings Insider Transactions Over The Last Year

The insider Wai Sheun Or made the biggest insider purchase in the last 12 months. That single transaction was for HK$1.8m worth of shares at a price of HK$4.84 each. That means that even when the share price was higher than HK$2.54 (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. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Wai Sheun Or was the only individual insider to buy during the last year.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Tian Lun Gas Holdings is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insider Ownership Of Tian Lun Gas Holdings

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. 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 23% of Tian Lun Gas Holdings shares, worth about HK$562m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Tian Lun Gas Holdings Tell Us?

It doesn't really mean much that no insider has traded Tian Lun Gas 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 Tian Lun Gas Holdings insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we've found that Tian Lun Gas Holdings has 3 warning signs (2 are significant!) that deserve your attention before going any further with your analysis.

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 of direct interests only, but not derivative transactions or indirect interests.

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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.