Kai Cheng Is The Executive Chairman & CEO of Shun Ho Holdings Limited (HKG:253) And They Just Picked Up 3.4% More Shares

Shun Ho Holdings Limited (HKG:253) shareholders (or potential shareholders) will be happy to see that the Executive Chairman & CEO, Kai Cheng, recently bought a whopping HK$4.9m worth of stock, at a price of HK$0.92. 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 3.4%.

View our latest analysis for Shun Ho Holdings

The Last 12 Months Of Insider Transactions At Shun Ho Holdings

In fact, the recent purchase by Kai Cheng was the biggest purchase of Shun Ho Holdings shares made by an insider individual in the last twelve months, according to our records. That means that an insider was happy to buy shares at around the current price of HK$0.95. That means they have been optimistic about the company in the past, though they may have changed their mind. 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. In this case we're pleased to report that the insider bought shares at close to current prices. Kai Cheng was the only individual insider to buy during the last year.

Kai Cheng bought 7.02m shares over the last 12 months at an average price of HK$0.96. 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 plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insider Ownership of Shun Ho Holdings

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Shun Ho Holdings insiders own 64% of the company, currently worth about HK$148m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Shun Ho Holdings Insider Transactions Indicate?

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 Shun Ho Holdings insiders are well aligned, and quite possibly think the share price is too low. Looks promising! 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. Our analysis shows 2 warning signs for Shun Ho Holdings (1 is concerning!) and we strongly recommend you look at them before investing.

Of course Shun Ho Holdings may not be the best stock to buy. So you may wish to see this free collection of high quality 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, but not derivative transactions.

If you’re looking to trade Shun Ho Holdings, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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