Trade Alert: The Founder & Executive Chairman Of China Dongxiang (Group) Co., Ltd. (HKG:3818), Yihong Chen, Has Just Spent CN¥4.6m Buying A Few More 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$4.6m worth of stock, at a price of HK$0.92. While that only increased their holding size by 0.2%, it is still a big swing by our standards.

View our latest analysis for China Dongxiang (Group)

The Last 12 Months Of Insider Transactions At China Dongxiang (Group)

In fact, the recent purchase by Founder & Executive Chairman Yihong Chen was not their only trade of China Dongxiang (Group) shares this year. Earlier in the year, they sold shares at a price ofHK$1.06 per share in a -HK$5.3m transaction. That means that an insider was selling shares at around the current price of HK$0.96. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

In the last twelve months insiders purchased 22.90m shares for HK$18m. On the other hand they divested 15.30m shares, for HK$16m. In the last twelve months there was more buying than selling by China Dongxiang (Group) insiders. They paid about HK$0.79 on average. Although they bought at below the recent share price, it is good to see that insiders are willing to invest in the company. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership

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. China Dongxiang (Group) insiders own 45% of the company, currently worth about HK$2.5b based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The China Dongxiang (Group) Insider Transactions Indicate?

The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. Once you factor in the high insider ownership, it certainly seems like insiders are positive about China Dongxiang (Group). That's what I like to see! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 2 warning signs for China Dongxiang (Group) (1 shouldn't be ignored!) and we strongly recommend you look at these before investing.

But note: China Dongxiang (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, 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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