China Investment Development Insiders Up HK$25m On HK$112m Investment

Insiders who bought China Investment Development Limited (HKG:204) stock lover the last 12 months are probably not as affected by last week’s 11% loss. Even after accounting for the recent loss, the HK$112m worth of stock purchased by them is now worth HK$136m or in other words, their investment continues to give good returns.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for China Investment Development

The Last 12 Months Of Insider Transactions At China Investment Development

In the last twelve months, the biggest single purchase by an insider was when insider Yu Ng bought HK$18m worth of shares at a price of HK$0.46 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$0.42). Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

In the last twelve months insiders purchased 320.71m shares for HK$112m. But they sold 46.59m shares for HK$18m. In the last twelve months there was more buying than selling by China Investment Development insiders. The average buy price was around HK$0.35. It is certainly positive to see that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

China Investment Development is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insiders At China Investment Development Have Bought Stock Recently

At China Investment Development,over the last quarter, we have observed quite a lot more insider buying than insider selling. Insiders spent HK$77m on shares. But we did see insider selling worth HK$8.3m. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.

Does China Investment Development Boast High 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. We usually like to see fairly high levels of insider ownership. China Investment Development insiders own about HK$139m worth of shares (which is 45% of the company). 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 China Investment Development Insider Transactions Indicate?

It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about China Investment Development. 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. For instance, we've identified 4 warning signs for China Investment Development (2 can'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.