Insiders were net buyers of Zheneng Jinjiang Environment Holding Company Limited’s (SGX:BWM ) stock during the past year. That is, insiders bought more stock than they sold.

Although we don’t think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

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In the last twelve months, the biggest single purchase by an insider was when insider Huang Bohao bought S$108m worth of shares at a price of S$0.60 per share. That means that an insider was happy to buy shares at above the current price of S$0.41. Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. 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 Huang Bohao.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Check out our latest analysis for Zheneng Jinjiang Environment Holding

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it’s a good sign if insiders own a significant number of shares in the company. It appears that Zheneng Jinjiang Environment Holding insiders own 14% of the company, worth about S$82m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. Given that insiders also own a fair bit of Zheneng Jinjiang Environment Holding we think they are probably pretty confident of a bright 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. Our analysis shows 2 warning signs for Zheneng Jinjiang Environment Holding (1 is a bit concerning!) and we strongly recommend you look at these before investing.