Denox Environmental & Technology Holdings Insiders Up CN¥3.2m On CN¥4.74m Investment

Insiders who bought Denox Environmental & Technology Holdings Limited (HKG:1452) in the last 12 months may probably not pay attention to the stock's recent 10% drop. Even after accounting for the recent loss, the CN¥4.74m worth of stock purchased by them is now worth CN¥7.90m or in other words, their investment continues to give good returns.

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 Denox Environmental & Technology Holdings

Denox Environmental & Technology Holdings Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Chairlady & CEO Shu Zhao for HK$4.7m worth of shares, at about HK$0.048 per share. Even though the purchase was made at a significantly lower price than the recent price (HK$0.08), we still think insider buying is a positive. 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.

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!

Denox Environmental & Technology 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.

Does Denox Environmental & Technology Holdings Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Denox Environmental & Technology Holdings insiders own 56% of the company, currently worth about HK$26m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Denox Environmental & Technology Holdings Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Denox Environmental & Technology Holdings shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Judging from their transactions, and high insider ownership, Denox Environmental & Technology Holdings insiders feel good about the company's future. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. When we did our research, we found 3 warning signs for Denox Environmental & Technology Holdings (1 is potentially serious!) that we believe deserve your full attention.

Of course Denox Environmental & Technology Holdings may not be the best stock to buy. So you may wish to see this free collection of high quality 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.

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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.