Having purchased CN¥12m worth of Ming Yuan Cloud Group Holdings Limited (HKG:909) stock, the recent 6.4% pullback is not what insiders may have expected

Insiders who bought CN¥12m worth of Ming Yuan Cloud Group Holdings Limited's (HKG:909) stock at an average buy price of CN¥4.93 over the last year may be disappointed by the recent 6.4% decrease in the stock. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only CN¥12m.

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 Ming Yuan Cloud Group Holdings

The Last 12 Months Of Insider Transactions At Ming Yuan Cloud Group Holdings

In the last twelve months, the biggest single purchase by an insider was when VP & Executive Director Xiaohui Chen bought HK$6.9m worth of shares at a price of HK$4.59 per share. That means that an insider was happy to buy shares at around the current price of HK$4.65. 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. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. Happily, the Ming Yuan Cloud Group Holdings insider decided to buy shares at close to current prices. Xiaohui Chen was the only individual insider to buy during the last year.

Xiaohui Chen bought a total of 2.50m shares over the year at an average price of HK$4.93. 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!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insider Ownership Of Ming Yuan Cloud Group Holdings

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Ming Yuan Cloud Group Holdings insiders own about HK$4.2b worth of shares (which is 49% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Ming Yuan Cloud Group Holdings Tell Us?

It doesn't really mean much that no insider has traded Ming Yuan Cloud Group Holdings 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 Ming Yuan Cloud Group Holdings insiders think the business has merit. 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. In terms of investment risks, we've identified 2 warning signs with Ming Yuan Cloud Group Holdings and understanding these should be part of your investment process.

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, 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.