Some of the losses seen by insiders who purchased HK$2.1m worth of Ching Lee Holdings Limited (HKG:3728) shares over the past year were recovered after the stock increased by 24% over the past week. However, the purchase is proving to be an expensive wager as insiders are yet to get ahead of their losses which currently stand at HK$225k since the time of purchase.
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.
Ching Lee Holdings Insider Transactions Over The Last Year
While no particular insider transaction stood out, we can still look at the overall trading.
Choi Wah Ng bought 10.94m shares over the last 12 months at an average price of HK$0.19. 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!
Ching Lee Holdings is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Ching Lee Holdings insiders own 70% of the company, worth about HK$120m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About Ching Lee Holdings Insiders?
We note a that there has been a bit of insider buying recently (but no selling). The net investment is not enough to encourage us much. On a brighter note, the transactions over the last year are encouraging. Judging from their transactions, and high insider ownership, Ching Lee Holdings insiders feel good about the company's 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. Case in point: We've spotted 2 warning signs for Ching Lee Holdings you should be aware of, and 1 of these is a bit concerning.
Of course Ching Lee Holdings 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, but not derivative transactions.
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.