Quite a few insiders have dramatically grown their holdings in Longfor Group Holdings Limited (HKG:960) over the past 12 months. An insider's optimism about the company's prospects is a positive sign.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

The Last 12 Months Of Insider Transactions At Longfor Group Holdings

In the last twelve months, the biggest single purchase by an insider was when insider Yajun Wu bought HK$1.1b worth of shares at a price of HK$9.80 per share. Even though the purchase was made at a significantly lower price than the recent price (HK$11.40), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Happily, we note that in the last year insiders paid HK$2.1b for 220.57m shares. But they sold 7.71m shares for HK$101m. In the last twelve months there was more buying than selling by Longfor Group Holdings insiders. 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!

Longfor Group 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.

Longfor Group Holdings Insiders Bought Stock Recently

Over the last three months, we've seen significantly more insider buying, than insider selling, at Longfor Group Holdings. In fact, five insiders bought HK$1.1b worth of shares. But CEO & Executive Chairperson Xuping Chen sold shares worth HK$20m. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.

Does Longfor Group Holdings Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Longfor Group Holdings insiders own 53% of the company, worth about HK$42b. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Longfor Group Holdings Insiders?

It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. When combined with notable insider ownership, these factors suggest Longfor Group Holdings insiders are well aligned, and quite possibly think the share price is too low. That's what I like to see! 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 example, Longfor Group Holdings has 5 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

But note: Longfor Group 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 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.