Insiders Rewarded With CN¥88m Addition To Investment As Fengyinhe Holdings Stock Hits HK$329m

Fengyinhe Holdings Limited (HKG:8030) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 24%, resulting in a HK$64m rise in the company's market capitalisation, translating to a gain of 314% on their initial investment. In other words, the original CN¥27.9m purchase is now worth CN¥115.6m.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Fengyinhe Holdings

Fengyinhe Holdings Insider Transactions Over The Last Year

The insider Chengjun Niu made the biggest insider purchase in the last 12 months. That single transaction was for HK$28m worth of shares at a price of HK$0.25 each. We do like to see buying, but this purchase was made at well below the current price of HK$0.97. 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.

In the last twelve months insiders purchased 119.15m shares for HK$28m. But insiders sold 4.14m shares worth HK$1.2m. In the last twelve months there was more buying than selling by Fengyinhe Holdings insiders. 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. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Fengyinhe Holdings Insiders Bought Stock Recently

There was some insider buying at Fengyinhe Holdings over the last quarter. insider Bingju Li bought HK$206k worth of shares in that time. It's good to see the insider buying, as well as the lack of recent sellers. However, in this case the amount invested recently is quite small.

Insider Ownership Of Fengyinhe Holdings

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Fengyinhe Holdings insiders own 51% of the company, currently worth about HK$168m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Fengyinhe Holdings Insider Transactions Indicate?

It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. When combined with notable insider ownership, these factors suggest Fengyinhe 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. To that end, you should learn about the 5 warning signs we've spotted with Fengyinhe Holdings (including 3 which are a bit concerning).

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.

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

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.