China Qidian Guofeng Holdings Limited (HKG:1280) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 16%, resulting in a HK$440m rise in the company's market capitalisation, translating to a gain of 382% on their initial investment. As a result, their original purchase of CN¥122.8m worth of stock is now worth CN¥591.8m.
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.
China Qidian Guofeng Holdings Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Executive Chairman Li Yuan bought HK$59m worth of shares at a price of HK$0.70 per share. Even though the purchase was made at a significantly lower price than the recent price (HK$3.36), 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.
In the last twelve months insiders purchased 176.12m shares for HK$123m. But they sold 6.98m shares for HK$3.8m. In the last twelve months there was more buying than selling by China Qidian Guofeng Holdings insiders. 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!
China Qidian Guofeng Holdings is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Insider Ownership
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. It's great to see that China Qidian Guofeng Holdings insiders own 26% of the company, worth about HK$840m. 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 Qidian Guofeng Holdings Insider Transactions Indicate?
It doesn't really mean much that no insider has traded China Qidian Guofeng 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 China Qidian Guofeng Holdings insiders think the business has merit. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. You'd be interested to know, that we found 3 warning signs for China Qidian Guofeng Holdings and we suggest you have a look.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.
