Insiders Of Fengyinhe Holdings Reap Rewards After Their Investment Jumps Another CN¥47m

Fengyinhe Holdings Limited (HKG:8030) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 17% resulting in a HK$583m addition to the company’s market value. As a result, their original purchase of CN¥9.28m worth of stock is now worth CN¥56.1m.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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The Last 12 Months Of Insider Transactions At Fengyinhe Holdings

Over the last year, we can see that the biggest insider purchase was by insider Chengjun Niu for HK$4.3m worth of shares, at about HK$12.23 per share. That means that an insider was happy to buy shares at above the current price of HK$12.00. 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. 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.

Fengyinhe Holdings insiders may have bought shares in the last year, but they didn't sell any. They paid about HK$1.98 on average. We don't deny that it is nice to see insiders buying stock in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. 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!

Check out our latest analysis for Fengyinhe Holdings

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Insiders At Fengyinhe Holdings Have Bought Stock Recently

Over the last quarter, Fengyinhe Holdings insiders have spent a meaningful amount on shares. We can see that insider Chengjun Niu paid HK$4.3m for shares in the company. No-one sold. This could be interpreted as suggesting a positive outlook.

Insider Ownership Of Fengyinhe Holdings

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Fengyinhe Holdings insiders own 52% of the company, worth about HK$2.1b. 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 Does This Data Suggest About Fengyinhe Holdings Insiders?

It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Fengyinhe Holdings. One for the watchlist, at least! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Fengyinhe Holdings. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Fengyinhe Holdings.

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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.