Guang Bao Meng Is The Executive Chairman of China Huajun Group Limited (HKG:377) And Just Spent CN¥68k On Shares

Whilst it may not be a huge deal, we thought it was good to see that the China Huajun Group Limited (HKG:377) Executive Chairman, Guang Bao Meng, recently bought HK$68k worth of stock, for HK$9.64 per share. Nevertheless, it only increased their shareholding by a minuscule percentage, and it wasn't a massive purchase by absolute value, either.

View our latest analysis for China Huajun Group

China Huajun Group Insider Transactions Over The Last Year

Executive Chairman Guang Bao Meng previously made an even bigger purchase of HK$351k worth of shares at a price of HK$10.04 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$9.90). Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

While China Huajun Group insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Does China Huajun Group Boast High 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. China Huajun Group insiders own about HK$454m worth of shares (which is 74% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At China Huajun Group Tell Us?

It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest China Huajun Group insiders are well aligned, and quite possibly think the share price is too low. Looks promising! 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. Be aware that China Huajun Group is showing 2 warning signs in our investment analysis, and 1 of those is potentially serious...

But note: China Huajun Group may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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, but not derivative transactions.

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This article by Simply Wall St is general in nature. 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.
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