China Jo-Jo Drugstores, Inc. (NASDAQ:CJJD) shareholders (or potential shareholders) will be happy to see that the Chairman & CEO, Lei Liu, recently bought a whopping US$4.7m worth of stock, at a price of US$1.87. That purchase boosted their holding by 516%, which makes us wonder if the move was inspired by quietly confident deeply-felt optimism.
The Last 12 Months Of Insider Transactions At China Jo-Jo Drugstores
In fact, the recent purchase by Lei Liu was the biggest purchase of China Jo-Jo Drugstores shares made by an insider individual in the last twelve months, according to our records. That means that an insider was happy to buy shares at above the current price of US$1.51. It's very possible they regret the purchase, but it's more likely they are bullish about the company. 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. Lei Liu was the only individual insider to buy during the last year.
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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.
Insider Ownership
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. It's great to see that China Jo-Jo Drugstores insiders own 45% of the company, worth about US$4.5m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The China Jo-Jo Drugstores Insider Transactions Indicate?
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about China Jo-Jo Drugstores. Looks promising! 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. Case in point: We've spotted 4 warning signs for China Jo-Jo Drugstores you should be aware of, and 2 of them don't sit too well with us.
Of course China Jo-Jo Drugstores may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.
