Last week, StarGlory Holdings Company Limited (HKG:8213) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 10% last week, resulting in a HK$22m increase in the company's market worth, implying a 24% gain on their initial purchase. Put another way, the original HK$20.0m acquisition is now worth HK$24.9m.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for StarGlory Holdings

The Last 12 Months Of Insider Transactions At StarGlory Holdings

In the last twelve months, the biggest single purchase by an insider was when insider Ting Fai Ng bought HK$10.0m worth of shares at a price of HK$0.35 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of HK$0.43. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

Ting Fai Ng purchased 57.14m shares over the year. The average price per share was HK$0.35. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership Of StarGlory Holdings

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. It's great to see that StarGlory Holdings insiders own 60% of the company, worth about HK$144m. 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 Do The StarGlory Holdings Insider Transactions Indicate?

It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest StarGlory Holdings insiders are well aligned, and quite possibly think the share price is too low. Looks promising! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 3 warning signs for StarGlory Holdings (2 don't sit too well with us!) that we believe deserve your full attention.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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.