Insiders Of Dragon Rise Group Holdings Are Up 505% On Their HK$20.9m Purchase

Dragon Rise Group Holdings Limited (HKG:6829) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 21%, resulting in a HK$60m rise in the company's market capitalisation, translating to a gain of 505% on their initial investment. As a result, the stock they originally bought for HK$20.9m is now worth HK$126.1m.

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 Dragon Rise Group Holdings

Dragon Rise Group Holdings Insider Transactions Over The Last Year

The Founder Yuk-Kit Yip made the biggest insider purchase in the last 12 months. That single transaction was for HK$21m worth of shares at a price of HK$0.20 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of HK$1.21. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

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!

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

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).

Insider Ownership

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. It's great to see that Dragon Rise Group Holdings insiders own 67% of the company, worth about HK$234m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Dragon Rise Group Holdings Insider Transactions Indicate?

It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Dragon Rise Group Holdings. That's what I like to see! 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. For instance, we've identified 5 warning signs for Dragon Rise Group Holdings (2 are a bit concerning) you should be aware of.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.