Bullish Capital Finance Holdings Insiders Rewarded As Their Investment Rises To HK$10.1m

Capital Finance Holdings Limited (HKG:8239) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 27%, resulting in a HK$12m rise in the company's market capitalisation, translating to a gain of 25% on their initial investment. As a result, their original purchase of HK$8.07m worth of stock is now worth HK$10.1m.

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.

See our latest analysis for Capital Finance Holdings

Capital Finance Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Chun Kit Chu bought HK$4.6m worth of shares at a price of HK$0.58 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of HK$0.70. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Over the last year, we can see that insiders have bought 14.45m shares worth HK$8.1m. But they sold 10.70m shares for HK$5.0m. Overall, Capital Finance Holdings insiders were net buyers during the last year. 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!

Capital Finance Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider 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. It's great to see that Capital Finance Holdings insiders own 55% of the company, worth about HK$30m. 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 Capital Finance Holdings Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. With high insider ownership and encouraging transactions, it seems like Capital Finance Holdings insiders think the business has merit. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Capital Finance Holdings. To that end, you should learn about the 3 warning signs we've spotted with Capital Finance Holdings (including 1 which is potentially serious).

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.