Some JL Mag Rare-Earth Co., Ltd. (SZSE:300748) shareholders may be a little concerned to see that insider Feng Lu recently sold a substantial CN¥8.2m worth of stock at a price of CN¥21.32 per share. That sale reduced their total holding by 15% which is hardly insignificant, but far from the worst we've seen.

JL Mag Rare-Earth Insider Transactions Over The Last Year

In fact, the recent sale by Feng Lu was the biggest sale of JL Mag Rare-Earth shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at slightly below the current price (CN¥22.02). 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 only 15% of Feng Lu's holding.

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

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insider Ownership Of JL Mag Rare-Earth

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. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that JL Mag Rare-Earth insiders own 1.1% of the company, worth about CN¥282m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At JL Mag Rare-Earth Tell Us?

An insider sold JL Mag Rare-Earth shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 5 warning signs for JL Mag Rare-Earth (2 are concerning!) and we strongly recommend you look at them before investing.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.