Despite Edianyun's Pullback, Insiders Still Gained CN¥174k

Edianyun Limited (HKG:2416) insiders who acquired shares over the previous 12 months, can probably afford to ignore the recent 13% decline in the stock price. After taking the recent loss into consideration, the CN¥1.18m worth of stock they bought is now worth CN¥1.36m, indicating that their investment yielded a positive return.

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 Edianyun

Edianyun Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Co-Founder Pengcheng Ji bought HK$793k worth of shares at a price of HK$1.07 per share. Even though the purchase was made at a significantly lower price than the recent price (HK$1.61), 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.

Pengcheng Ji bought 843.00k shares over the last 12 months at an average price of HK$1.40. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

Edianyun 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 Edianyun Boast High 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. Insiders own 23% of Edianyun shares, worth about HK$210m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Edianyun Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Edianyun shares in the last quarter. However, our analysis of transactions over the last year is heartening. With high insider ownership and encouraging transactions, it seems like Edianyun insiders think the business has merit. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. In terms of investment risks, we've identified 1 warning sign with Edianyun and understanding this should be part of your investment process.

But note: Edianyun 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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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.