With Huicheng International Holdings Up 12%, Insider Buyers Count Their Returns

Huicheng International Holdings Limited (HKG:1146) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 12%, resulting in a HK$24m rise in the company's market capitalisation, translating to a gain of 164% on their initial investment. In other words, the original CN¥3.63m purchase is now worth CN¥9.59m.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Huicheng International Holdings

The Last 12 Months Of Insider Transactions At Huicheng International Holdings

Over the last year, we can see that the biggest insider purchase was by CFO & Executive Director Xiaoyun Huang for HK$2.2m worth of shares, at about HK$0.024 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of HK$0.067. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Xiaoyun Huang bought 143.16m shares over the last 12 months at an average price of HK$0.025. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Huicheng International Holdings is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

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. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 27% of Huicheng International Holdings shares, worth about HK$62m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Huicheng International Holdings Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Huicheng International Holdings and their transactions don't cause us concern. While it's good to be aware of 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. For example, Huicheng International Holdings has 3 warning signs (and 2 which make us uncomfortable) we think you should know about.

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.