Insiders Of Zhi Sheng Group Holdings Are Up 859% On Their CN¥14.3m Purchase

Zhi Sheng Group Holdings Limited (HKG:8370) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 11% resulting in a HK$42m addition to the company’s market value. As a result, their original purchase of CN¥14.3m worth of stock is now worth CN¥136.7m.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Zhi Sheng Group Holdings

Zhi Sheng Group Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when CEO & Executive Director Ningning Lai bought HK$9.9m worth of shares at a price of HK$0.30 per share. We do like to see buying, but this purchase was made at well below the current price of HK$2.92. 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.

While Zhi Sheng Group Holdings insiders bought shares during the last year, they didn't sell. 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!

Zhi Sheng Group 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.

Insiders At Zhi Sheng Group Holdings Have Bought Stock Recently

Over the last quarter, Zhi Sheng Group Holdings insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought HK$13m worth of shares. This is a positive in our book as it implies some confidence.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Zhi Sheng Group Holdings insiders own about HK$238m worth of shares (which is 59% 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 Zhi Sheng Group Holdings Tell Us?

It is good to see recent purchasing. 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 Zhi Sheng Group Holdings insiders are well aligned, and quite possibly think the share price is too low. Looks promising! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 4 warning signs for Zhi Sheng Group Holdings you should be aware of, and 3 of these are significant.

Of course Zhi Sheng Group 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 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.