While AInnovation Technology Group Co., Ltd (HKG:2121) shareholders have enjoyed a good week with stock up 21%, they need remain vigilant. Although prices were relatively low, insiders chose to sell CN¥33m worth of stock in the past 12 months. This could be a sign of impending weakness.

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.

The Last 12 Months Of Insider Transactions At AInnovation Technology Group

In the last twelve months, the biggest single purchase by an insider was when CEO & Executive Director Hui Xu bought HK$22m worth of shares at a price of HK$3.06 per share. Even though the purchase was made at a significantly lower price than the recent price (HK$5.78), 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.

Over the last year, we can see that insiders have bought 7.25m shares worth HK$22m. But they sold 9.56m shares for HK$33m. Over the last year we saw more insider selling of AInnovation Technology Group shares, than buying. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like AInnovation Technology Group better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. AInnovation Technology Group insiders own about HK$527m worth of shares. That equates to 17% of the company. 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 AInnovation Technology Group Tell Us?

It doesn't really mean much that no insider has traded AInnovation Technology Group shares in the last quarter. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the AInnovation Technology Group insiders selling. 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 AInnovation Technology Group has 2 warning signs (1 can't be ignored!) that deserve your attention before going any further with your analysis.

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.