Feishang Anthracite Resources Limited (HKG:1738) is up 12%, while insiders who purchased CN¥78m are up 83%

Feishang Anthracite Resources Limited (HKG:1738) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 12%, resulting in a HK$179m rise in the company's market capitalisation. Put another way, the original CN¥78m acquisition is now worth CN¥143m.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Feishang Anthracite Resources

Feishang Anthracite Resources Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by insider Feilie Li for HK$78m worth of shares, at about HK$0.65 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of HK$1.19. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

The chart below shows insider transactions (by companies and individuals) over the last year. 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. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Feishang Anthracite Resources insiders own 69% of the company, currently worth about HK$1.1b based on the recent share price. 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 Feishang Anthracite Resources Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. But insiders have shown more of an appetite for the stock, over the last year. With high insider ownership and encouraging transactions, it seems like Feishang Anthracite Resources insiders think the business has merit. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of Feishang Anthracite Resources.

But note: Feishang Anthracite Resources 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, but not derivative transactions.

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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.