iDreamSky Technology Holdings Insiders CN¥2.4m Short Of Breakeven On Stock Purchase

Insiders who purchased CN¥9.13m worth of iDreamSky Technology Holdings Limited (HKG:1119) shares over the past year recouped some of their losses after price gained 11% last week. However, total losses seen by insiders are still CN¥2.4m since the time of purchase.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for iDreamSky Technology Holdings

The Last 12 Months Of Insider Transactions At iDreamSky Technology Holdings

In the last twelve months, the biggest single purchase by an insider was when Co-founder Xiangyu Chen bought HK$2.2m worth of shares at a price of HK$2.24 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$1.77). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. The only individual insider to buy over the last year was Xiangyu Chen.

Xiangyu Chen bought a total of 3.78m shares over the year at an average price of HK$2.42. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

iDreamSky Technology Holdings is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Does iDreamSky Technology Holdings Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. iDreamSky Technology Holdings insiders own about HK$541m worth of shares. That equates to 18% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At iDreamSky Technology Holdings Tell Us?

The fact that there have been no iDreamSky Technology Holdings insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. It would be great to see more insider buying, but overall it seems like iDreamSky Technology Holdings insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the 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. Case in point: We've spotted 2 warning signs for iDreamSky Technology Holdings you should be aware of, and 1 of these is a bit concerning.

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.