Insiders Who Purchased CN¥10.1m Of Guangdong Join-Share Financing Guarantee Investment Stock May Not Have Expected 17% Tumble

The recent price decline of 17% in Guangdong Join-Share Financing Guarantee Investment Co., Ltd.'s (HKG:1543) stock may have disappointed insiders who bought CN¥10.1m worth of shares at an average price of CN¥0.78 in the past 12 months. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth CN¥6.51m, which is not great.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Guangdong Join-Share Financing Guarantee Investment

Guangdong Join-Share Financing Guarantee Investment Insider Transactions Over The Last Year

The insider Zhi Jian Wu made the biggest insider purchase in the last 12 months. That single transaction was for HK$9.4m worth of shares at a price of HK$0.78 each. That means that an insider was happy to buy shares at above the current price of HK$0.50. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Zhi Jian Wu was the only individual insider to buy during the last year.

Zhi Jian Wu bought a total of 13.01m shares over the year at an average price of HK$0.78. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 16% of Guangdong Join-Share Financing Guarantee Investment shares, worth about HK$127m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Guangdong Join-Share Financing Guarantee Investment Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. It would be great to see more insider buying, but overall it seems like Guangdong Join-Share Financing Guarantee Investment insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Guangdong Join-Share Financing Guarantee Investment. For instance, we've identified 3 warning signs for Guangdong Join-Share Financing Guarantee Investment (1 shouldn't be ignored) you should be aware of.

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 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.