Kwong Luen Engineering Holdings Limited (HKG:1413) insiders who acquired shares over the previous 12 months, can probably afford to ignore the recent 24% decline in the stock price. After accounting for the recent loss, the HK$8.93m worth of shares they purchased is now worth HK$10.4m, suggesting a good return on their investment.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Kwong Luen Engineering Holdings

Kwong Luen Engineering Holdings Insider Transactions Over The Last Year

The insider, Zhenwei Yang, made the biggest insider sale in the last 12 months. That single transaction was for HK$14m worth of shares at a price of HK$0.28 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of HK$0.14. So it may not shed much light on insider confidence at current levels. Zhenwei Yang was the only individual insider to sell over the last year.

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

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Kwong Luen Engineering Holdings Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at Kwong Luen Engineering Holdings. insider Tung Tsun Cheung spent HK$8.9m on stock, and there wasn't any selling. That shows some optimism about the company's future.

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. Insiders own 23% of Kwong Luen Engineering Holdings shares, worth about HK$39m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Kwong Luen Engineering Holdings Tell Us?

The recent insider purchase is heartening. On the other hand the transaction history, over the last year, isn't so positive. We don't take much heart from transactions by Kwong Luen Engineering Holdings insiders over the last year. But they own a reasonable amount of the company, and there was some buying recently. In short they are likely aligned with shareholders. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 5 warning signs for Kwong Luen Engineering Holdings you should be aware of, and 3 of these are concerning.

But note: Kwong Luen Engineering 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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