Trade Alert: The Executive Chairman Of Cosmo Lady (China) Holdings Company Limited (HKG:2298), Yaonan Zheng, Has Just Spent CN¥2.1m Buying 9.3% More Shares

By
Simply Wall St
Published
June 02, 2021
SEHK:2298
Source: Shutterstock

Potential Cosmo Lady (China) Holdings Company Limited (HKG:2298) shareholders may wish to note that the Executive Chairman, Yaonan Zheng, recently bought HK$2.1m worth of stock, paying HK$1.03 for each share. While that's a very decent purchase to our minds, it was proportionally a bit modest, boosting their holding by just 9.3%.

Check out our latest analysis for Cosmo Lady (China) Holdings

Cosmo Lady (China) Holdings Insider Transactions Over The Last Year

In fact, the recent purchase by Yaonan Zheng was the biggest purchase of Cosmo Lady (China) Holdings shares made by an insider individual in the last twelve months, according to our records. We do like to see buying, but this purchase was made at well below the current price of HK$1.18. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

In the last twelve months Cosmo Lady (China) Holdings insiders were buying shares, but not selling. Their average price was about HK$0.63. We don't deny that it is nice to see insiders buying stock in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. 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!

insider-trading-volume
SEHK:2298 Insider Trading Volume June 2nd 2021

Cosmo Lady (China) 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.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 19% of Cosmo Lady (China) Holdings shares, worth about HK$481m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Cosmo Lady (China) Holdings 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. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Cosmo Lady (China) Holdings insiders are well aligned, and quite possibly think the share price is too low. One for the watchlist, at least! If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

But note: Cosmo Lady (China) 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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