Trade Alert: The CFO & Executive Director Of China Outfitters Holdings Limited (HKG:1146), Xiaoyun Huang, Has Just Spent CN¥16m Buying 68% More Shares

Those following along with China Outfitters Holdings Limited (HKG:1146) will no doubt be intrigued by the recent purchase of shares by Xiaoyun Huang, CFO & Executive Director of the company, who spent a stonking HK$16m on stock at an average price of HK$0.12. That increased their holding by a full 68%, which arguably implies the sort of confidence required for a shy sweet-natured nerd to ask the most popular kid in the school to go out on a date.

Check out our latest analysis for China Outfitters Holdings

China Outfitters Holdings Insider Transactions Over The Last Year

In fact, the recent purchase by Xiaoyun Huang was the biggest purchase of China Outfitters Holdings shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$0.12). It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Xiaoyun Huang 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. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

China Outfitters 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.

Does China Outfitters Holdings Boast High Insider Ownership?

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. China Outfitters Holdings insiders own about HK$77m worth of shares. That equates to 19% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About China Outfitters Holdings Insiders?

It's certainly positive 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 Outfitters Holdings insiders are well aligned, and that they may think the share price is too low. While we like knowing 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 3 warning signs for China Outfitters Holdings you should be aware of, and 1 of them is a bit concerning.

But note: China Outfitters Holdings 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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