China Rongzhong Financial Holdings Reaches HK$252m Market Cap Benefiting Insider Stock Buying

Last week, China Rongzhong Financial Holdings Company Limited (HKG:3963) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 54% last week, resulting in a HK$88m increase in the company's market worth, implying a 935% gain on their initial purchase. As a result, the stock they originally bought for HK$1.34m is now worth HK$13.9m.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for China Rongzhong Financial Holdings

China Rongzhong Financial Holdings Insider Transactions Over The Last Year

The insider Cheuk Yin Lee made the biggest insider purchase in the last 12 months. That single transaction was for HK$1.3m worth of shares at a price of HK$0.058 each. Even though the purchase was made at a significantly lower price than the recent price (HK$0.60), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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 Of China Rongzhong Financial Holdings

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. China Rongzhong Financial Holdings insiders own about HK$45m worth of shares. That equates to 18% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The China Rongzhong Financial Holdings Insider Transactions Indicate?

The fact that there have been no China Rongzhong Financial Holdings insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. Overall we don't see anything to make us think China Rongzhong Financial Holdings insiders are doubting the company, and they do own shares. 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 4 warning signs for China Rongzhong Financial Holdings (3 can't be ignored!) and we strongly recommend you look at these before investing.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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 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.