Investors who take an interest in Kinergy Corporation Ltd. (HKG:3302) should definitely note that the CEO & Executive Director, Kuak Choi Lim, recently paid HK$0.15 per share to buy HK$2.7m worth of the stock. Although the purchase only increased their holding by 6.3%, it is still a solid purchase in our view.

Kinergy Insider Transactions Over The Last Year

In fact, the recent purchase by Kuak Choi Lim was the biggest purchase of Kinergy shares made by an insider individual in the last twelve months, according to our records. Even though the purchase was made at a significantly lower price than the recent price (HK$0.18), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

In the last twelve months Kinergy insiders were buying shares, but not selling. 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 undervalued small cap companies that insiders are buying.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Kinergy insiders own about HK$76m worth of shares (which is 45% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Kinergy Tell Us?

It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest Kinergy insiders are well aligned, and quite possibly think the share price is too low. Looks promising! While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Case in point: We've spotted 1 warning sign for Kinergy you should be aware of.

But note: Kinergy 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 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.