While $DONGYUE GROUP(00189.HK)$ shareholders have enjoyed a good week with stock up 7.9%, they need remain vigilant.  In spite of the relatively cheap prices, insiders made the decision to sell CN¥3.7m worth of stock in the last 12 months. This could be a warning indicator of vulnerabilities in the future.

While insider transactions are not the most important thing when it comes to long-term investing,  logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Dongyue Group

Dongyue Group Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Executive Director, Jian Zhang, sold HK$3.7m worth of shares at a price of HK$9.20 per share.    So it's clear an insider wanted to take some cash off the table, even below the current price of HK$9.46.  When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation.  However, while insider selling is sometimes discouraging, it's only a weak signal.   We note that the biggest single sale was 100% of Jian Zhang's holding.      Jian Zhang was the only individual insider to sell over the last year.

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

SEHK:189 Insider Trading Volume May 17th 2022

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership of Dongyue Group

For a common shareholder, it is worth checking how many shares are held by company insiders.  I reckon it's a good sign if insiders own a significant number of shares in the company.   It's great to see that Dongyue Group insiders own 16% of the company, worth about HK$3.3b.  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 Does This Data Suggest About Dongyue Group Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much.      While we feel good about high insider ownership of Dongyue Group, we can't say the same about the selling of shares.       So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company.    For instance, we've identified 3 warning signs for Dongyue Group (1 can't be ignored) you should be aware of.

But note: Dongyue Group 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.