Insiders Re-Evaluate Their CN¥81.3m Stock Purchase As Huisen Shares Group Falls To HK$420m

The recent price decline of 23% in Huisen Shares Group Limited's (HKG:2127) stock may have disappointed insiders who bought CN¥81.3m worth of shares at an average price of CN¥0.13 in the past 12 months. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only CN¥70.0m.

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

View our latest analysis for Huisen Shares Group

The Last 12 Months Of Insider Transactions At Huisen Shares Group

In the last twelve months, the biggest single purchase by an insider was when insider Hong Yiew Kwok bought HK$41m worth of shares at a price of HK$0.13 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$0.11). Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

Huisen Shares Group insiders may have bought shares in the last year, but they didn't sell any. 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!

Huisen Shares Group 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 Of Huisen Shares Group

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Huisen Shares Group insiders own about HK$303m worth of shares (which is 72% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Huisen Shares Group Tell Us?

It doesn't really mean much that no insider has traded Huisen Shares Group shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Judging from their transactions, and high insider ownership, Huisen Shares Group insiders feel good about the company's future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Huisen Shares Group. Every company has risks, and we've spotted 6 warning signs for Huisen Shares Group (of which 3 make us uncomfortable!) you should know about.

But note: Huisen Shares 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 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com