Insider Buying: The China Dongxiang (Group) Co., Ltd. (HKG:3818) Founder & Executive Chairman Just Bought CN¥9.5m Worth Of Shares

China Dongxiang (Group) Co., Ltd. (HKG:3818) shareholders (or potential shareholders) will be happy to see that the Founder & Executive Chairman, Yihong Chen, recently bought a whopping HK$9.5m worth of stock, at a price of HK$0.72. There's no denying a buy of that magnitude suggests conviction in a brighter future, although we do note that proportionally it only increased their holding by 0.6%.

Check out our latest analysis for China Dongxiang (Group)

China Dongxiang (Group) Insider Transactions Over The Last Year

Notably, that recent purchase by Yihong Chen is the biggest insider purchase of China Dongxiang (Group) shares that we've seen in the last year. That implies that an insider found the current price of HK$0.77 per share to be enticing. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. Happily, the China Dongxiang (Group) insiders decided to buy shares at close to current prices. We note that Yihong Chen was also the biggest seller.

In the last twelve months insiders purchased 70.71m shares for HK$57m. But insiders sold 15.30m shares worth HK$16m. In total, China Dongxiang (Group) insiders bought more than they sold over the last year. Their average price was about HK$0.81. I'd consider this a positive as it suggests insiders see value at around the current price. 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!

China Dongxiang (Group) 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

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. It's great to see that China Dongxiang (Group) insiders own 46% of the company, worth about HK$2.1b. 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 China Dongxiang (Group) Tell Us?

It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. Once you factor in the high insider ownership, it certainly seems like insiders are positive about China Dongxiang (Group). Nice! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For example, China Dongxiang (Group) has 3 warning signs (and 1 which is potentially serious) we think you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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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